Exhibit 10.5
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is executed as of the 29th day of
December, 2000 ("Closing Date"), between USRR ACQUISITION CORP., an
Indiana corporation (the "Company"), and BANK ONE, INDIANA, NATIONAL
ASSOCIATION, a national banking association with its principal
office in Indianapolis, Indiana (the "Bank").
ARTICLE I
Definition of Terms
Section 1.01. Accounting Terms/Financial Statements. All accounting and
financial terms used in this Agreement are used with the meanings such terms
would be given in accordance with GAAP, except as may be otherwise specifically
provided in this Agreement.
Section 1.02. Definitions. The following terms have the meanings indicated
when used in this Agreement with the initial letter capitalized:
"Acquisition" means the acquisition by the Company of all of the capital
stock of U.S. Rubber Reclaiming, Inc., an Indiana corporation, from
SerVaas, Inc. and the merger of U.S. Rubber Reclaiming, Inc. with and into
the Company, with the Company as the surviving corporation, as contemplated
by the Acquisition Documents.
"Acquisition Documents" means all documents, instruments and agreements
evidencing and entered into in connection with the Acquisition.
"Advance" means a disbursement of proceeds against the Revolving Loan or
the Equipment Loan.
"Affiliate" means, with respect to any Person, any officer, shareholder or
director of such Person and any Person or group acting in concert in
respect of the Person in question that, directly or indirectly, controls or
is controlled by or is under common control with such Person.
"Agreement" means this Credit Agreement, as amended, modified, supplemented
andlor restated from time to time and at any time.
"Applicable Spread" means (a) with respect to the Revolving Loan,
three-quarters of one percent (.75%) per annum; and (b) with respect to
Term Loan I, Term Loan II, and the Equipment Loan, one percent (1%) per
annum.
"Application for Advance" means a written application of the Company for a
disbursement of proceeds of the Revolving Loan or Equipment Loan
substantially in the form of Exhibit "A" attached hereto.
"Authorized Officer" means the Chief Executive Officer, the President or
Chief Financial Officer of the Company.
"Bank" has the meaning ascribed to such term in the preamble to this
Agreement.
"Bank Debt" has the meaning ascribed to such term in Section 8.10 of this
Agreement.
"Banking Day" means a day on which the principal offices of the Bank in the
City of Indianapolis, Indiana, are open for the purpose of conducting
substantially all of the Bank's business activities.
"BOC" means BANK ONE CORPORATION and all of its Subsidiaries (including
Bank), affiliates and divisions.
"Borrowing Base" means, at any date a determination thereof is made, an
amount equal to the sum of: (a) eighty percent (80%) of the book value of
the Eligible Accounts; and (b) fifty percent (50%) of the book value of the
Eligible Inventory.
"Borrowing Base Certificate" means the certificate in the form of Exhibit
"B" hereto which is required to be delivered to the Bank in accordance with
Section 5.0 1(b)(7) hereof.
"Capital Contribution Agreement" means a capital contribution agreement in
form and substance as Exhibit "C" attached to this Agreement, between OCP
and the Bank, as the same may be amended, modified, supplemented and/or
restated from time to time and at any time.
"Capital Lease" means, at any time, any lease of property (whether real,
personal or mixed) with respect to which the lessee is required
concurrently to recognize the acquisition of an asset and the incurrence of
a liability in accordance with GAAP.
"Change of Control of Company" means OCP shall cease to own Voting Stock of
the Company, including securities that are freely and without material
conditions convertible into or exchangeable for Voting Stock of the
Company, in an aggregate amount representing 51% of the total aggregate
voting power of all classes of the Voting Stock of the Company, calculated
on a fully diluted basis, including securities convertible into or
exchangeable for Voting Stock of the Company.
"Change of Control of OCP" means 0CC shall cease to be the sole general
partner of OCP.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning ascribed to such term in Section 4.0 1(a) of
this Agreement.
"Company's Auditors" means Birk, Gross, Xxxx & Xxxxxxx, P.C., or such other
independent certified public accounting firm in the United States as is
acceptable to the Bank.
"Conversion Date" has the meaning ascribed to such term in Section 2.04(a)
of this Agreement.
"Debt" means, with reference to any Person, as of any date, without
duplication: (a) all indebtedness, liabilities and obligations of such
Person for borrowed money and its redemption obligations in respect of
mandatorily redeemable preferred stock; (b) obligations of such Person to
pay the deferred purchase or acquisition price of property (tangible or
intangible, real or personal) or services, other than trade accounts
payable (if not for borrowed money) arising, and accrued expenses incurred,
in the ordinary course of business; (c) all obligations of such Person
appearing as a liability on its balance sheet in accordance with GAAP in
respect of Capital Leases; (d) all obligations, indebtedness and
liabilities which are secured by any Lien on any asset of such Person,
whether or not the obligation, indebtedness or liability secured thereby
shall have been assumed by such Person (e) all obligations for Interest
Rate Agreements of such Person; and (f) all obligations, indebtedness and
liabilities of others similar in character to those described in clauses
(a) through (e) of this definition for which such Person is liable,
contingently or otherwise, as obligor, guarantor or in any other capacity,
or in respect of which obligations. indebtedness or liabilities such Person
assures a creditor against loss or agrees to take any action to prevent any
such loss (other than endorsements of negotiable instruments for collection
in the ordinary course of business), including without limitation all
reimbursement obligations of such Person in respect of letters of credit,
surety bonds or similar obligations and all obligations of such Person to
advance funds to, or to purchase assets, property or services from, any
other Person in order to maintain the financial condition of such other
Person. Debt of any Person shall include all obligations of such Person of
the character described in clauses (a) through (f) above to the extent such
Person remains legally liable in respect thereof notwithstanding that any
such obligation is deemed to be extinguished under GAAP.
"EBITDA" means, for any fiscal period of the Company, the Net Income for
such period (minus or plus, to the extent included in the determination of
such Net Income, any gain or loss (i) which must be treated as an
extraordinary item under GAAP or (ii) realized upon the sale or other
disposition of any real property or equipment that is not sold in the
ordinary course of business), plus (a) (without duplication and only to the
extent deducted in determining such Net Income and all as determined in
accordance with GAAP), the sum of (1) Interest (excluding Interest which is
capitalized and added to principal), (2) federal, state and local income
tax expense (excluding deferred income taxes), (3) depreciation and
amortization; and (4) management fees (and the like) paid by the Company
during such period; and (b) capital contributions to the Company made by
OCP pursuant to a Request (as such term is defined in the Capital
Contribution Agreement) that under the terms of the Capital Contribution
Agreement are deemed to have been made during such fiscal period.
"Eligible Accounts" means, at any date a determination thereof is to be
made, those outstanding accounts receivable of the Company for which the
Company shall have furnished to the Bank information adequate for purposes
of identification at times and in form and substance as may be requested by
the Bank; provided however, that an account receivable shall not constitute
an Eligible Account if it: (a) remains unpaid sixty (60) days after the
original due date for its payment stated on the applicable invoice; (b) is
an account receivable with respect to which the account receivable debtor
is the subject of a bankruptcy or similar insolvency proceeding or has made
an assignment for the benefit of creditors or whose assets have been
conveyed to a receiver or trustee or who is no longer conducting its
customary business, except and to the extent the Bank otherwise agrees in
writing; (c) is an account receivable which is not invoiced (and dated as
of the date of such invoice) and sent to the account receivable debtor
within the ordinary course of the business of the Company and in accordance
with customary billing practices after delivery of the underlying goods to,
or performance of the underlying services for, the accounts receivable
debtor; (d) is an account receivable arising with respect to goods which
have not been shipped or arising with respect to services which have not
been fully performed; (e) is an account receivable with respect to which
the account receivable debtor's obligation to pay the account receivable is
conditional upon the account receivable debtor's approval or is otherwise
subject to any repurchase obligation or return right, as with sales made on
a xxxx-and-hold, guaranteed sale, sale-and-return, sale on approval or
consignment basis; (f) is an account receivable in which the Bank does not
have a first priority, perfected security interest; (g) is an account
receivable due from any Affiliate of the Company or which is due solely
from an accounts receivable debtor which is a United States federal
governmental entity or agency, except and to the extent the Bank otherwise
agrees in writing; or (h) is an account receivable evidenced by chattel
paper or an instrument (as defined in Article 9 of the Indiana Uniform
Commercial Code) not in the possession of the Bank. At any time more than
twenty-five percent (25%) of the aggregate amount of accounts receivable
due from an accounts receivable debtor remain unpaid more than sixty (60)
days after the date(s) due as stated on the original invoice(s) evidencing
such accounts receivable, then no accounts receivable due the Company from
that accounts receivable debtor shall constitute an Eligible Account.
Further, to the extent that an Eligible Account is subject to any set-off,
offset, credit or other reduction right held by the account receivable
debtor, then for purposes of determining the Borrowing Base the amount of
such Eligible Account shall be reduced by the sum of all such offsets,
credits and reductions.
"Eligible Inventory" means, at any date a determination thereof is to be
made, the Company's raw material inventory and finished goods inventory but
excluding all such inventory: (a) held by a third party on consignment or
subject to any repurchase option or arrangement or return right, as with
sales made on xxxx-and-hold, guaranteed sale, sale-and-return, sale on
approval or consignment basis; (b) raw material inventory and finished
goods inventory in transit, shipped and otherwise not on site at the
business premises of the Company; (c) SerVaas Inventory that has not yet
been purchased and paid for by the Company under the SerVaas Inventory
Agreement.
"Environmental Laws" means all federal, state and local laws and
implementing regulations, now or hereafter effective during the term of
this Agreement, relating to pollution or protection of the environment,
including laws or regulations relating to or permitting emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment (including without limitation ambient air, surface water,
ground water, or land), or to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, industrial wastes, or hazardous substances. Such
laws shall include, but not be limited to: (a) the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42
U.S.C.ss.9601 e seq.; (b) the Resource Conservation and Recovery Act, as
amended, 42 U.S.C.ss.6901 et seq., including the statutes regulating
underground storage tanks, 42 U.S.C. 6991-6991h; (c) the Clean Air Act, as
amended, 42 U.S.C. 7401 et seq.; and (d) the Federal Water Pollution
Control Act, as amended, 33 U.S.C.ss.1251 et seq., including the statute
regulating the National Pollutant Discharge Elimination System, 33
U.S.C.ss.1342.
"Equipment Loan" has the meaning ascribed to such term in Section 2.04 of
this Agreement.
"Equipment Loan Maturity Date" means the earlier of (a) November 30, 2006,
or (b) the date on which the Bank accelerates the maturity of Equipment
Loan in accordance with Section 7.02 of this Agreement.
"Equipment Note" has the meaning ascribed to such term in Section 2.04(b)
of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" means any of the events described in Section 7.01 of
this Agreement. "Fixed Charge Coverage Ratio" means, for any fiscal period
of the Company, the ratio which results from dividing EBITDA for such
period by the Fixed Charges for such period.
"Fixed Charges" means, for any fiscal period of the Company, the sum of the
following (without duplication): (a) the principal amount of the Debt of
the Company, determined in accordance with GAAP, which was payable during
such period; (b) the amount of Interest for which the Company, determined
in accordance with GAAP, is liable and which was paid or payable during
such period; (c) federal, state and local income taxes payable by the
Company, determined in accordance with GAAP, which was paid or payable
during such period; (d) cash capital expenditures during such period
(provided that, for purposes of determining Fixed Charges during fiscal
year 2001, the Company's cash capital expenditures during the relevant
fiscal period shall be deemed to be the greater (i) $75,000.00 times the
number of fiscal quarters that have elapsed during such period, or (ii) the
Company's actual cash capital expenditures during such period, divided by
four, and multiplied by the number of fiscal quarters that have elapsed
during such period; (e) cash dividends and distributions to the
stockholders of the Company paid or accrued during such period with the
prior consent of the Bank; and (f) management fees (and the like) paid
during such period.
"Financial Statements" includes, but is not limited to, balance sheets,
profit and loss statements, and cash flow statements, prepared in
accordance with GAAP.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, which shall include the official
interpretations thereof by the Financial Accounting Standards Board,
consistently applied (from and after the date hereof) and for the period as
to which such accounting principles are to apply. Except as otherwise
provided in this Agreement, to the extent applicable, all computations and
determinations as to accounting or financial matters and all Financial
Statements to be delivered pursuant to this Agreement shall be made and
prepared in accordance with GAAP (including principles of consolidation
where appropriate), and, to the extent applicable, all accounting or
financial terms shall have the meanings ascribed to such terms by GAAP.
"Hazardous Substance" means any hazardous or toxic substance regulated by
any Environmental Laws, including but not limited to the Comprehensive
Environmental Response, Compensation and Liability Act the Resource
Conservation and Recovery Act and the Toxic Substance Control Act, or by
any federal, state or local governmental agencies having jurisdiction over
the control of any such substance including but not limited to the United
States Environmental Protection Agency.
"Highest Lawful Rate" means the maximum rate of interest which may be
charged the Company by the Bank under applicable state or federal usury law
or regulation or any other law or regulation, however characterized,
limiting the rate of interest which may be charged to corporations.
"Informal Request" has the meaning ascribed to such term in Section 2.0
1(b) of this Agreement.
"Intangible Assets" means amortizable loan costs, business acquisition
costs, license agreements, trademarks, trade names, patents, capitalized
research and development, proprietary products (the results of past
research and development treated as long term assets and excluded from
inventory), goodwill and all other assets which would be classified as
intangible assets (all determined in accordance with generally accepted
accounting principles consistently applied).
"Interest" means, for any fiscal period and for any Person, the amount
equal to the sum of (a) the gross interest expense of such Person for that
period plus, (b) capitalized interest on any Debt of such Person, in each
case determined in accordance with GAAP.
"Intercreditor Agreement" means an intercreditor agreement in form and
substance as Exhibit "E" attached to this Agreement, between SerVaas, Inc.
and the Bank, and consented to by the Company, as the same may be amended,
modified, supplemented and/or restated from time to time.
"Interest Rate Agreement" means any interest rate hedging agreement,
interest rate swap agreement, interest rate cap agreement, or other
interest rate protection agreement or arrangement designed to protect the
Company against fluctuations in interest rates. (The amount of the
obligation under any Interest Rate Agreement shall be the amount determined
in respect thereof as of the end of the most recently ended fiscal quarter
of such Person, based on the assumption that such Interest Rate Agreement
had terminated at the end of such fiscal quarter, and in making such
determination, if any agreement relating to such Interest Rate Agreement
provides for the netting of amounts payable by and to such Person
thereunder of if any such agreement provides for the simultaneous payment
of amounts by and to such Person, then in each such case, the amount of
such obligation shall be the net amount so determined.)
"Investment" means any investment, in cash or by delivery of property, made
directly or indirectly in any other Person, whether by acquisition of
shares of capital stock, Debt or other obligations or securities or by
loan, advance, capital contribution or otherwise.
"Lien" means any mortgage, security interest, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise)
or other security interest or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale or
other title retention agreement, any financing or similar statement or
notice filed under the Uniform Commercial Code as in effect in any
jurisdiction, or any other similar recording or notice statute, and any
lease having substantially the same effect as the foregoing, but excluding
any equipment operating leases and any precautionary filings related
thereto).
"Loan Documents" means, collectively, this Agreement, the Notes, the
Mortgage, the Security Agreement, the Capital Contribution Agreement, the
SerVaas Subordination Agreement and all other instruments, agreements and
documents executed and delivered or to be delivered by the Company or any
guarantor pursuant to or by virtue of this Agreement, and any and all
Interest Rate Agreements which at any time from and after the Closing Date
may be made between the Company and the Bank, as each of the foregoing may
be amended, modified, extended, renewed, supplemented and/or restated from
time to time and at any time, and when used in the singular form, means any
of the Loan Documents, as the context requires.
"Loans" means, collectively, the Revolving Loan, Term Loan I, Term Loan II
and the Equipment Loan.
"Loss" has the meaning ascribed to such term in Section 8.11 of this
Agreement.
"Materially Adverse Effect" means any event, circumstance or condition that
could reasonably be expected to have a materially adverse effect on (a) the
business, operations, financial condition, properties or prospects of the
Company and its Subsidiaries, considered on a consolidated basis, (b) the
ability of the Company or any guarantor to pay or perform the Obligations,
(c) the validity or enforceability of any of the Loan Documents, or any
material provision thereof or any transaction contemplated thereby, or (d)
the rights and remedies of the Bank under any of the Loan Documents.
"Maturity Date" means the earlier of (i) the Scheduled Maturity Date, or
(ii) that date upon which the Bank accelerates payment of any of the Loans
in accordance with Section 7.02 of this Agreement.
"Maximum Availability" means, as of the date any determination thereof is
to be made, the lesser of (i) the sum of $3,000,000.00, or (ii) the amount
of the Borrowing Base of such date.
"Mortgage" shall mean a Deed of Trust, Security Agreement and Assignment of
Leases and Rents executed by the Company in favor of the Bank, as the same
may be amended, modified, supplemented and/or restated from time to time
and at any time.
"Net Income" means, for any period, the net income of the Company,
determined for such period in accordance with GAAP.
"Net Worth" means, as of the date any determination thereof is to be made,
the net worth of the Company as of such date, determined in accordance with
GAAP.
"Notes" means, collectively, the Revolving Note, Term Note I, Term Note II
and the Equipment Note.
"Obligations" means all present and future indebtedness, obligations and
liabilities, and all renewals and extensions thereof, now or hereafter owed
to the Bank by the Company, whether arising under, by virtue of or pursuant
to any of this Agreement, the Notes, any other Loan Documents, or otherwise
(including without limiting the generality of the foregoing, all
indebtedness, obligations and liabilities hereafter arising by virtue of or
in connection with any extensions of credit by the Bank to the Company
unrelated to and not made under this Agreement), together with all costs,
expenses and reasonable attorneys' fees incurred by the Bank in the
enforcement or collection thereof, whether such indebtedness, obligations
and liabilities are direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, joint and several, now exist or hereafter
arise, or were prior to acquisition thereof by the Bank owed to some other
Person.
"0CC" means Obsidian Capital Company, LLC, an Indiana limited liability
company.
"OCP" means Obsidian Capital Partners, L.P., a Delaware limited
partnership.
"Officer's Certificate" means a certificate in form and substance as
Exhibit "F" attached hereto, or in such other form as the Bank may request
from time to time, signed by an Authorized Officer confirming that all of
the representations and warranties contained in Section 3.01 (other than
Section 3.01(d)) of this Agreement are true and correct as of the date of
such certificate except as specified therein and with the further
exceptions that all other representations will be construed to have been
amended to conform with any changes of which the Company shall have
previously given the Bank notice in writing. The Officer's Certificate
shall further confirm that the most current Financial Statements provided
by the Company to the Bank were prepared in accordance with GAAP, and
present fairly the financial position of the Company as of the dates
thereof and the results of the operations of the Company for the periods
covered, and that since the date of the most current Financial Statements
provided by the Company to the Bank there has been no materially adverse
change in the financial position of the Company or in the results of its
operations. The Officer's Certificate shall further confirm that no Event
of Default or Unmatured Event of Default shall have occurred and be
continuing as of the date of the Officer's Certificate or shall describe
any such event which shall have occurred and be then continuing and the
steps being taken by the Company to correct it. In addition, the Officer's
Certificate shall demonstrate compliance with the financial covenants
stated in Section 5.01(g), as applicable. Such Officer's Certificate shall
relate the covenants to the quarter end figures shown in the latest
quarterly Financial Statements furnished to the Bank, and shall otherwise
be in such form and provide such detail as may be reasonably satisfactory
to the Bank.
"Person" means an individual, a corporation, a limited or general
partnership, a limited liability company, a joint venture, a trust or
unincorporated organization, a joint stock company or other similar
organization, a government or any political subdivision thereof, a court,
or any other legal entity, whether acting in an individual, fiduciary or
other capacity.
"Plan" means an employee pension benefit plan as defined in ERISA.
"Prime-based Rate" means a variable rate per annum at which interest
accrues on all or a portion of the Loans under the terms of this Agreement,
equal at all times to the Prime Rate, as in effect from time to time, plus
the Applicable Spread.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by the Bank or its parent (which is not
necessarily the lowest rate charged to any customer), changing when and as
said prime rate changes.
"Provident Loan Agreement" means that certain Loan Agreement dated November
20, 2000, between OCP and The Provident Bank.
"Provident Pledge Agreement" means that certain Pledge Agreement
(Subscription Agreement) dated November 20,2000, between OCP and the
Provident Bank.
"Ratio of Total Funded Debt to EBITDA" means, for any fiscal period of the
Company, the ratio of Total Funded Debt of the Company at the close of that
period to EBITDA of the Company for that period, computed and determined in
accordance with GAAP; provided that, for purposes of calculating the Ratio
of Total Funded Debt to EBITDA of the Company as of the end of each fiscal
quarter ending after December 31, 2000, and prior to December 31, 2001,
EBITDA shall be the Company's EBITDA for the period of all such fiscal
quarters ending on such close, divided by the number of fiscal quarters
which have then elapsed, and multiplied by four.
"Real Estate" shall have the meaning ascribed to such term in Section 4.0
1(b) of this Agreement.
"Revolving Loan" has the meaning ascribed to such term in Section 2.0 1(a)
of this Agreement.
"Revolving Note" has the meaning ascribed to such term in Section 2.01(b)
of this Agreement.
"Scheduled Maturity Date" means November 30, 2001, or such later date as
may be established pursuant to Section 2.01(e) of this Agreement.
"Security Agreement" means the Security Agreement, dated as of the Closing
Date, executed by the Company in favor of the Bank, as the same may be
amended, modified, supplemented and/or restated from time to time and at
any time.
"SerVaas Inventory" means raw material inventory consisting of road worn
domestic and foreign scrap inner tubes and factory reject tubes located on
the premises of the Company at 0000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx,
distributed by U.S. Rubber Reclaiming, Inc. to SerVaas, Inc. prior to the
Acquisition.
SerVaas Inventory Agreement" means that certain Supply and Consignment t
Agreement dated December 29, 2000, between the Company and SerVaas, Inc.
regarding the purchase by the Company of the SerVaas Inventory.
"SerVaas Note" means the Promissory Note in the principal sum of
$1,750,000.00 dated December 29, 2000, executed by the Company to the order
of SerVaas, Inc.
"SerVaas Subordination Agreement" means a subordination agreement in form
and substance as Exhibit "D" attached to this Agreement, between and among
SerVaas, Inc., the Company, and the Bank, as the same may be amended,
modified, supplemented and/or restated from time to time and at any time.
"Subordinated Debt" means any unsecured Debt owed by the Company to any
Person (other than Debt owed to SerVaas, Inc., or its successors and
assigns, under the SerVaas InventoryAgreement), the payment of which Debt
is fully and unconditionally subordinated to the Obligations pursuant to a
subordination agreement which is in form and substance as approved and
agreed to in writing by the Bank.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, joint venture or other business entity (whether now or
existing or hereafter organized or acquired) over which the Person
exercises control, provided that it shall be conclusively presumed that the
Person exercises control over any such entity (a) if more than 50% of the
equity interest in such entity is owned by the Person, directly or
indirectly; or (b) if at least a majority of the securities of each class
having ordinary voting power for the election of directors (other than
securities which have such power only by reason of the happening of a
contingency) at the time as of which the determination is being made, is
owned, beneficially and of record, by such Person or by one or more of the
other Subsidiaries of such Person or by any combination thereof.
"Tangible Capital Base" means, as of the date any determination thereof is
to be made, the Net Worth of the Company as of such date, less the amount
of all Intangible Assets of the Company as of such date, determined in
accordance with GAAP and plus Subordinated Debt of the Company as of such
date.
"Term Loan I" has the meaning ascribed to such term in Section 2.02 of this
Agreement.
"Term Loan II" has the meaning ascribed to such term in Section 2.03 of
this Agreement.
"Term Loan Maturity Date" means the earlier of (a) November 30, 2005, or
(b) the date on which the Bank accelerates the maturity of Term Loan I
and/or Term Loan II in accordance with Section 7.02 of this Agreement.
"Term Note I" has the meaning ascribed to such term in Section 2.02(b) of
this Agreement.
"Term Note II" has the meaning ascribed to such term in Section 2.03(b) of
this Agreement.
"Total Funded Debt" means, with respect to the Company, as of the date any
determination thereof is to be made, all interest-bearing Debt of the
Company (including interest-bearing Subordinated Debt), computed and
determined in accordance with GAAP.
"Unmatured Event of Default" means any event specified in Section 7.01 of
this Agreement, which is not initially an Event of Default, but which
would, if uncured, become an Event of Default with the giving of notice or
the passage of time or both.
"Voting Stock" means all classes of capital stock of the Company then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors of the Company.
ARTICLE II
Borrowing Terms
Section 2.01. Revolving Loan. Provided that all of the conditions of
lending stated in Section 6.01(a) and (b) of this Agreement have been fulfilled,
and subject to and in accordance with the terms of this Agreement, and in
reliance upon the representations, warranties, covenants and agreements of the
Company made in this Agreement and the other Loan Documents, the Bank will make
the Revolving Loan described in this Section 2.01.
(a) The Commitment -- Use of Proceeds. The Bank agrees, subject to the
terms and conditions of this Agreement, to make Advances to the Company on a
revolving basis (the "Revolving Loan") from time to time from and after the
Closing Date until the Maturity Date, in an amount not exceeding in the
aggregate at any time outstanding the Maximum Availability. Proceeds of the
Revolving Loan may be used by the Company only to fund general working capital
requirements and to finance the Acquisition.
(b) Method of Borrowing. The obligation of the Company to repay the
Revolving Loan shall be evidenced by a promissory note executed by the Company
to the Bank in form and substance acceptable to the Bank (as the same may be
amended, modified, extended, renewed, supplemented, replaced and/or restated
from time to time and at any time, the "Revolving Note"). So long as no Event of
Default or Unmatured Event of Default shall have occurred and be continuing and
until the Maturity Date, the Company may borrow, repay and re-borrow under the
Revolving Note on any Banking Day, provided that the Company shall not be
entitled to receive and the Bank shall not be obligated to make any Advance: (i)
at any time an Event of Default or an Unmatured Event of Default has occurred or
is continuing; (ii) if the amount of such Advance would exceed the Maximum
Availability; or (iii) if after making such Advance the principal balance of the
Revolving Loan would exceed the Maximum Availability. Whenever the Company
desires the Bank to make an Advance of the Revolving Loan, the Bank to make an
Advance of the Revolving Loan, the Company shall give the Bank telecopy or
telephonic notice not later than 10:00 A.M., Indianapolis time, on the date the
Advance is to be made, which notice shall specify the amount and the date of the
requested Advance. The Company shall be entitled to request no more than one
Advance of the Revolving Loan to be made on any Banking Day. Each Advance
requested under the Revolving Loan shall be conditioned upon receipt by the Bank
from the Company of an Application for Advance, provided that the Bank may, at
its discretion, make a disbursement upon the oral request of the Company made by
an Authorized Officer, or upon a request transmitted to the Bank by telecopy or
by any other form of written electronic communication (all such requests for
Advances being hereafter referred to as "Informal Requests"). In so doing, the
Bank may rely on any Informal Request which shall have been received by it in
good faith from a Person reasonably believed to be an Authorized Officer. Each
Informal Request shall be promptly confirmed by a duly executed Application for
Advance if the Bank so requires and shall in and of itself constitute the
representation of the Company that no Event of Default or Unmatured Event of
Default has occurred and is continuing or would result from the making of the
requested Advance, that the requested Advance would not cause the outstanding
principal balance of the Revolving Loan to exceed the Maximum Availability. Each
Advance shall be made on a Banking Day. All borrowings and reborrowings and all
repayments shall be in amounts of not less than Fifty Thousand Dollars
($50,000), except for repayment of the entire principal balance of the Revolving
Loan. Upon receipt of an Application for Advance, or at the Bank's discretion
upon receipt of an Informal Request for an Advance and upon compliance any other
conditions of lending stated in Section 6.01 of this Agreement, the Bank shall
disburse the amount of the requested Advance to the Company on the date
designated for the Advance. All Advances by the Bank and payments by the Company
shall be recorded by the Bank on its books and records, and the principal amount
outstanding from time to time, plus interest payable thereon, shall be
determined by reference to the books and records of the Bank. The Bank's books
and records shall be presumed prima facie to be correct as to such matters.
(c) Interest on the Revolving Loan. The principal amount of the
Revolving Loan outstanding from time to time shall bear interest until maturity
of the Revolving Note at a rate per annum equal to the Prime-based Rate. After
the Maturity Date and until paid in full, the Revolving Loan shall bear interest
at a per annum rate equal to the Prime-based Rate plus three percent (3 .0%) per
annum. Each change in the rate of interest to be charged on any Advance shall
become effective on the date of each change in the Prime Rate. Accrued interest
shall be due and payable monthly on the first day of each successive calendar
month, beginning February 1, 2001, until the Maturity Date. On the Maturity
Date, the entire unpaid principal balance of the Revolving Loan and Revolving
Note and all unpaid, accrued interest thereon, shall be due and payable in full
without demand. After the Maturity Date, interest shall be payable as accrued
and without demand.
(d) Repayment of Advances. Subject to the provisions hereinafter set
forth with respect to acceleration of the maturity of the Revolving Loan, the
entire unpaid principal balance of the Revolving Loan and Revolving Note, and
all unpaid accrued interest thereon, shall be due and payable in full, without
demand, on the Maturity Date.
(e) Extensions of Scheduled Maturity Date. The Bank may, upon the
request of the Company, but at the Bank's sole discretion, extend the Scheduled
Maturity Date from time to time to such date or dates as the Bank may elect by
notice in writing to the Company, and upon any such extension, the date to which
the Scheduled Maturity Date is then extended will become the "Scheduled Maturity
Date" for purposes of this Agreement.
(f) Mandatory Prepayments of Principal. At any time that the
outstanding principal balance of the Revolving Loan exceeds the Maximum
Availability, the Company shall, immediately and without notice or demand of any
kind, repay that portion of the unpaid principal balance of the Revolving Loan
which is in excess of the Maximum Availability. If an Event of Default or an
Unmatured Event of Default has occurred and is continuing and the Bank shall
have notified the Company of the election of the Bank to take any action
specified in Section 7.02 of this Agreement, the Maximum Availability shall be
automatically reduced to zero (0) dollars without any action on the part of or
the giving of any additional notice to the Company by the Bank.
Section 2.02. Term Loan I. Provided that all of the conditions of
lending stated in Section 6.0 1(a) and (b) of this Agreement have been fulfilled
on the Closing Date, and subject to and in accordance with the terms of this
Agreement, and in reliance upon the representations, warranties, covenants, and
agreements of the Company made in this Agreement and the other Loan Documents,
the Bank will make a term loan ( `Term Loan I") to the Company on the Closing
Date on the following terms and subject to the following conditions:
(a) Amount. The principal amount of Term Loan I shall be the sum of
$2,500,000.00.
(b)Term Note I. The obligation of the Company to repay Term Loan I
shall be evidenced by a promissory note in form and substance acceptable to the
Bank (as the same may hereafter be amended, extended, renewed, replaced and/or
restated from time to time and at any time, "Term Note I"). The principal of
Term Loan I shall be repayable in equal monthly installments in the amount of
$34,722.22 on the first day of each successive calendar month, beginning
February 1, 2001, and continuing on the first day of each calendar month
thereafter until the Term Loan Maturity Date, on which date the entire unpaid
principal balance of Term Loan I shall be due and payable together with all
accrued and unpaid interest.
The principal of Term Loan I may be prepaid at any time in whole or in
part, provided that any partial prepayment shall be in an amount which is an
integral multiple of Ten Thousand Dollars ($10,000.00), and provided further
that all partial prepayments shall be applied to the scheduled installments of
principal in the inverse order of their maturities.
(c) Interest on Term Loan I. The unpaid principal balance from time to
time of Term Loan I and the Term Note I shall bear interest from the Closing
Date until the Term Loan Maturity Date at a rate per annum equal to the
Prime-based Rate. After the Term Loan Maturity Date, interest on the unpaid
principal balance of Term Loan I and Term Note I will accrue at the Prime-based
Rate plus three percent (3%) per annum. Prior to the Term Loan Maturity Date,
interest which accrues on Term Loan I and Term Note I shall be due and payable
on the first day of each successive calendar month, beginning on February
1,2001. After the Term Loan Maturity Date, interest which accrues on Term Loan I
and Term Note I shall be payable as accrued and without demand.
(d) Use of Proceeds of Term Loan I. The proceeds of Term Loan I shall be
used in their entirety to finance the Acquisition.
Section 2.03. Term Loan II. Provided that all of the conditions of
lending stated in Sections 6.01(a) and (b) of this Agreement have been fulfilled
on the Closing Date, and subject to and in accordance with the terms of this
Agreement, and in reliance upon the representations, warranties, covenants, and
agreements of the Company made in this Agreement and the other Loan Documents,
the Bank will make a term loan ("Term Loan II") to the Company on the Closing
Date on the following terms and subject to the following conditions:
(a) Amount. The principal amount of Term Loan II shall be the sum of
$500,000.00.
(b) Term Note II. The obligation of the Company to repay Term Loan II shall
be evidenced by a promissory note in form and substance acceptable to the Bank
(as the same may hereafter be amended, extended, renewed, replaced and/or
restated from time to time and at any time, "Term Note II"). The principal of
Term Loan II shall be repayable in equal monthly installments in the amount of
$2,777.78 on the first day of each successive calendar month, beginning February
1, 2001, and continuing on the first day of each calendar month thereafter until
the Term Loan Maturity Date, on which date the entire unpaid principal balance
of Term Loan II shall be due and payable together with all accrued and unpaid
interest.
The principal of Term Loan II may be prepaid at any time in whole or in
part, provided that any partial prepayment shall be in an amount which is an
integral multiple of Ten Thousand Dollars ($10,000.00), and provided further
that all partial prepayments shall be applied to the scheduled installments of
principal in the inverse order of their maturities.
(c) Interest on Term Loan II. The unpaid principal balance from time to
time of Term Loan II and the Term Note II shall bear interest from the Closing
Date until the Term Loan Maturity Date at a rate per annum equal to the
Prime-based Rate, and after the Term Loan Maturity Date, at the Prime-based Rate
plus three percent (3%) per annum. Prior to the Term Loan Maturity Date,
interest which accrues on Term Loan II and Term Note II shall be due and payable
on the first day of each successive calendar month, beginning on February 1,
2001. After the Term Loan Maturity Date, interest which accrues on Term Loan II
and Term Note II shall be payable as accrued and without demand.
(d) Use of Proceeds of Term Loan II. The proceeds of Term Loan II shall be
used in their entirety to finance the Acquisition.
Section 2.04. Equipment Loan. Provided that all of the conditions of
lending stated in Section 6.0 1(a) and (b) of this Agreement have been
fulfilled, and subject to and in accordance with the terms of this Agreement,
and in reliance upon the representations, warranties, covenants and agreements
of the Company made in this Agreement and the other Loan Documents, the Bank
will make the Equipment Loan described in this Section 2.04.
(a) The Commitment -- Use of Proceeds. The Bank agrees, subject to the
terms and conditions of this Agreement, to make Advances to the Company (the
"Equipment Loan") from time to time from and after the Closing Date until
November 30, 2001 (the "Conversion Date"), in an amount not exceeding in the
aggregate the sum of Two Hundred Thousand Dollars ($200,000.00). Proceeds of the
Equipment Loan may be used by the Company only to finance up to 90% of the
purchase price of equipment purchased by the Company.
(b) Method of Borrowing. The obligation of the Company to repay the
Equipment Loan shall be evidenced by a promissory note executed by the Company
to the Bank in form and substance acceptable to the Bank (as the same may be
amended, modified, extended, renewed, supplemented, replaced and/or restated
from time to time and at any time, the "Equipment Note"). So long as no Event of
Default or Unmatured Event of Default shall have occurred and be continuing and
until the Conversion Date, the Company may borrow under the Equipment Note on
any Banking Day, provided that the Company shall not be entitled to receive and
the Bank shall not be obligated to make any Advance: (i) at any time an Event of
Default or an Unmatured Event of Default has occurred or is continuing; (ii) if
the amount of such Advance would exceed 90% of the purchase price of the
equipment to be financed with such Advance; or (iii) if after making such
Advance aggregate amount of all Advances under the Equipment Loan would exceed
$200.000.00. Whenever the Company desires the Bank to make an Advance of the
Equipment Loan, the Company shall give the Bank telecopy or telephonic notice
not later than 10:00 A.M., Indianapolis time, on the date the Advance is to be
made, which notice shall specify the amount and the date of the requested
Advance. The Company shall be entitled to request no more than one Advance of
the Equipment Loan to be made on any Banking Day. Each Advance requested under
the Equipment Loan shall be conditioned upon receipt by the Bank from the
Company of an Application for Advance, accompanied in each case by a copy of the
invoice, purchase agreement, or other evidence satisfactory to the Bank of the
purchase price of the equipment the Company proposes to finance with such
Advance. Each Advance shall be made on a Banking Day. All borrowings shall be in
amounts of not less than Five Thousand Dollars ($5,000.00). Upon receipt of an
Application for Advance, and upon compliance with any other conditions of
lending stated in Section 6.01 of this Agreement, the Bank shall disburse the
amount of the requested Advance to the Company on the date designated for the
Advance. All Advances by the Bank and payments by the Company shall be recorded
by the Bank on its books and records, and the principal amount outstanding from
time to time, plus interest payable thereon, shall be determined by reference to
the books and records of the Bank. The Bank's books and records shall be
presumed prima facie to be correct as to such matters.
(c) Interest on the Equipment Loan. The principal amount of the
Equipment Loan outstanding from time to time shall bear interest until maturity
of the Equipment Note at a rate per annum equal to the Prime-based Rate. After
the Maturity Date and until paid in full, the Equipment Loan shall bear interest
at a per annum rate equal to the Prime-based Rate plus three percent (3.0%) per
annum. Each change in the rate of interest to be charged on any Advance shall
become effective on the date of each change in the Prime Rate. Accrued interest
shall be due and payable monthly on the first day of each successive calendar
month, beginning [January] 1, 2001, until the Maturity Date. On the Maturity
Date, the entire unpaid principal balance of the Equipment Loan and Equipment
Note and all unpaid, accrued interest thereon, shall be due and payable in full
without demand. After the Maturity Date, interest shall be payable as accrued
and without demand.
(d) Repayment of Equipment Loan. The principal of the Equipment Loan
shall be repayable in equal monthly installments in an amount equal to one
eighty-fourth (1/84th) of the principal amount of the Equipment Loan outstanding
on the Conversion Date, on the first day of each successive calendar month,
beginning December 1, 2001, and continuing on the first day of each calendar
month thereafter until the Equipment Loan Maturity Date, on which date the
entire unpaid principal balance of Equipment Loan shall be due and payable
together with all accrued and unpaid interest.
The principal of Equipment Loan may be prepaid at any time in whole or in
part, provided that any partial prepayment shall be in an amount which is an
integral multiple of Ten Thousand Dollars ($10,000.00), and provided further
that all partial prepayments shall be applied to the scheduled installments of
principal in the inverse order of their maturities.
Section 2.05. Provisions Applicable to All Obligations. The following
provisions shall be applicable to all of the Obligations:
(a) Calculation of Interest. Interest on all Obligations shall be
calculated on the basis of actual days elapsed and that an entire year's
interest is earned in three hundred sixty (360) days.
(b) Manner of Payment -- Application. All payments of principal and
interest on each of the Loans shall be payable at the principal office of the
Bank in Indianapolis, Indiana. in funds available for the Bank's immediate use
in that city and for the Bank's account addressed as follows:
Bank One, Indiana, National Association
ABA #000000000
Attn: Commercial Loan Note Servicing
Re: USRR Acquisition Corp.
Account No.
No payment will be considered to have been made until received in such funds.
Unless otherwise agreed to, in writing, or otherwise required by applicable law,
payments will be applied first to accrued, unpaid interest, then to principal,
and any remaining amount to any unpaid collection costs, late charges and other
charges; provided however, upon delinquency or other default, the Bank reserves
the right to apply payments among principal, interest, late charges, collection
costs and other charges at their discretion, as determined by the Bank. All
prepayments shall be applied to the indebtedness owing hereunder in such order
and manner as the Bank may from time to time determine in its sole discretion.
(c) Automatic Debit. The Bank may without further authority debit when
due all payments of principal and interest or any other Obligations due and
payable by the Company under the terms of this Agreement or any other Loan
Document to any deposit account maintained with the Bank by the Company.
(d) Unconditional Obligations and No Deductions. The Company's
obligation to make all payments provided for in this Agreement and the Notes
shall be unconditional. Each such payment shall be made without relief from
valuation and appraisement laws and without deduction for any claim, defense or
offset of any type, including without limitation any withholdings and other
deductions on account of income or other taxes and regardless of whether any
claims, defenses or offsets of any type exist.
(e) Payment on Non-Banking Days. Whenever any payment to be made under
this Agreement or the Notes shall be stated to be due on a day other than a
Banking Day, such payment may be made on the next succeeding Banking Day, and
such extension of time shall in such case be included in the computation of
payment of fees, if any, and interest under this Agreement or the Notes.
(f) Additional Amounts Payable. If any change or the enactment,
adoption or judicial or administrative interpretation of any law, regulation,
treaty, guideline or directive (including, without limitation, Regulation D of
the Board of Governors of the Federal Reserve System) either (a) subject the
Bank to any additional tax, duty, charge, deduction or withholding with respect
to any of the Loans (other than a tax measure by the net or gross income of the
Bank), or (b) imposes or increases any reserve, special deposit or similar
requirement on account of any of the Loans not otherwise provided in this
Agreement or (c) imposes increased minimum capital requirements on the Bank on
account of its issuing or maintaining any of the Loans; and if any of the
foregoing (i) results in any increase to the Bank in the cost of issuing or
maintaining any of the Loans, or making any payment on account of any of the
Loans, (ii) reduces the amount of any payment receivable by the Bank under this
Agreement with respect to any of the Loans, (iii) requires the Bank to make any
payment calculated by reference to the gross amount of any sum received or paid
by the Bank pursuant to any of the Loans, or (iv) reduces the rate of return on
the Bank's capital to a level below that which the Bank could otherwise have
achieved (taking into consideration the Bank's policies with respect to capital
adequacy), then the Company shall pay to the Bank, as additional compensation
for the Loans, such amounts as will compensate the Bank for such increased
costs, payments or reductions. Within twenty (20) days after (A) the initial
demand therefor and (b) presentation by the Bank of a certificate to the Company
containing a statement of the cause of such increased costs, payments or
reductions and a calculation of the amounts thereof (which statement and
calculation shall be presumed prima facie to be correct), the Company shall pay
the additional amount payable measured from the date such change, enactment,
adoption or interpretation first affects the Bank.
ARTICLE III
Representations and Warranties
Section 3.01. Representations and Warranties. To induce the Bank to make
the Loans, the Company represents and warrants to the Bank that, after giving
effect to the Acquisition:
(a) Existence and Authority. The Company is a corporation duly organized
and validly existing under the laws of the State of Indiana. The Company is
qualified to do business in the State of Mississippi and in every other
jurisdiction in which: (i) the nature of the business conducted by it or the
character or location of properties owned or leased by it, or the residences or
activities of its employees, make such qualification necessary; and (ii) failure
so to qualify might have a Materially Adverse Effect. No jurisdiction in which
the Company is not qualified to do business has asserted that the Company is
required to be qualified therein. The principal office and chief executive
office of the Company is located at 0000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx
00000. The Company has no Subsidiaries. The Company does not conduct any
material operations or keep any material amounts of property at any location
other than the locations specified in the Security Agreement. The Company has
not done business under any name other than its present corporate name.
(b) Authorization/No Conflict. The execution and delivery of this
Agreement, the borrowings hereunder, the execution and delivery of all of the
other Loan Documents and the Acquisition Documents and the performance by the
Company of its obligations under this Agreement and all of the other Loan
Documents and the Acquisition Documents are within the powers of the Company,
have been duly authorized by all necessary action, have received any required
governmental or regulatory agency approvals and do not and will not contravene
or conflict with any provision of law or of the Articles of Incorporation or
By-Laws of the Company or of any agreement binding upon the Company.
(c) Validity and Binding Nature. This Agreement, all of the other Loan
Documents, and the Acquisition Documents to which the Company is a party are the
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws enacted for the relief of debtors generally and other
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles which may affect the availability of specific performance
and other equitable remedies.
(d) Financial Statements and Financial Information. The Company has
delivered or caused to be delivered to the Bank the company-prepared Financial
Statements of 0CC as of November 30, 2000, which Financial Statements have been
prepared in accordance with GAAP. Such Financial Statements present fairly the
financial position of 0CC as of the date thereof and the results of its
operations for the periods covered, and since the date of the most current
Financial Statements provided to the Bank there has been no materially adverse
change in the financial position of 0CC.
(e) Litigation and Contingent Liabilities. No litigation, arbitration
proceedings or governmental proceedings are pending or to the best of the
Company's knowledge threatened against the Company, 0CC, or OCP which would, if
adversely determined, have a Materially Adverse Effect. The Company has no
material, contingent liabilities other than those identified on Schedule 3.01(e)
to this Agreement. OCP has no material liabilities, except for its obligations
under the Provident Loan Agreement. 0CC has no material, contingent liabilities
not provided for or disclosed in the Financial Statements referred to in Section
3.0 1(d), above.
(f) Liens. None of the assets of the Company or OCP are or will be subject
to any Lien (including without limitation any seller or vendor's lien or right
of reclamation), except for Liens described in Sections 5.02(b)(1) through (7)
of this Agreement, and, with respect to OCP, the Lien of the Provident Pledge
Agreement.
(g) Employee Benefit Plans. Each Plan maintained by the Company is in
material compliance with ERISA, the Code, and all applicable rules and
regulations adopted by regulatory authorities pursuant thereto, and the Company
has filed all reports and returns required to be filed by ERLSA, the Code and
such rules and regulations. To the knowledge of the Company, no Plan maintained
by the Company and no trust created under any such Plan has incurred any
"accumulated funding deficiency" within the meaning of Section 41 2(c)( 1) of
the the Code, and the present value of all benefits vested under each Plan did
not exceed, as of the last valuation date, the value of the assets of the
respective Plans allocable to such vested The Company has no knowledge that any
"reportable event" as defined in ERISA has with respect to any Plan of the
Company.
(h) Payment of Taxes. The Company, OCP, and 0CC have filed all federal,
state and local tax returns and tax related reports which any of them is
required to file by' any statute or regulation and all taxes and any tax related
interest payments and penalties that are due and payable have been paid, except
for such as are being contested in good faith and by appropriate proceedings and
as to which appropriate reserves have been established. Adequate provision has
been made for the payment when due of all tax liabilities which have been
incurred, but are not as yet due and payable.
(i) Investment Company Act. The Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(j) Regulation U. The Company is not engaged 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. Not more than twenty-five
percent (25%) of the assets of the Company consists of margin stock, within the
contemplation of Regulation U, as amended.
(k) Hazardous Substances. Except as disclosed on Schedule 3.0 1(k), to the
best knowledge of the Company after due inquiry and investigation, (i) no
premises owned or occupied by or under lease to the Company have ever been used,
and as of the date of this Agreement, no such premises are being used for any
activities involving the use, treatment, transportation, generation, storage or
disposal of any Hazardous Substances except in compliance with Environmental
Laws, and (ii) no Hazardous Substances have been released on any such premises
in violation of any Environmental Law, nor is there any threat of release of any
Hazardous Substances in violation of any Environmental Laws on any such
premises.
(1) Subsidiaries/Parent. The Company has no Subsidiaries. OCP is the sole
stockholder of the Company. 0CC is the general partner of OCP.
(m) Real Estate. The Company does not own or lease any real property other
than the Real Estate identified in the Mortgage.
(n) Acquisition Documents. Schedule 3.01(n) attached to this Agreement is
an accurate and complete list of the Acquisition Documents.
ARTICLE IV
Security for Obligations
Section 4.01. Collateral for the Obligations. Until paid in full, the
Obligations will be secured by the following:
(a) Security Agreement. The Obligations shall be secured by a valid and
enforceable first priority security interest and Lien in and to all personal
property of the Company, tangible and intangible, now owned and existing or
hereafter acquired or arising, including, without limitation, all equipment,
inventory, accounts receivable, investment property and general intangibles and
all proceeds and products thereof (collectively, the "Collateral"), which
security interest shall be granted to the Bank by the Security Agreement,
subject only to Liens and security interests described in the exceptions
enumerated in subsections 5.02(b)(1) through (7) of this Agreement. In the event
the Company owns or acquires tangible or intangible personal property that the
Bank deems is or may not be covered as Collateral by the Security Agreement or
in which the Bank deems its security interest is or may not be perfected, the
Company covenants and agrees promptly, upon the request of the Bank, to execute
such other security instruments and documents and take such other actions as the
Bank may require to grant to the Bank a perfected security interest therein, all
of which security instruments and documents shall be in form and substance
satisfactory to the Bank and its counsel in all respects.
(b) Company Real Estate. The Obligations shall be secured by security
interests and liens on all real estate and improvements, including all fixtures,
equipment, furnishings, systems, and related property located thereon
(collectively, the "Real Estate") now owned or hereafter acquired and owned by
the Company, including all proceeds thereof, pursuant to the Mortgage and
pursuant to such other real estate mortgages or deeds of trust as the Bank may
require, all in form and substance satisfactory to the Bank in all respects
duly' executed. acknowledged and delivered to the Bank in recordable form. The
Company further covenants and agrees to provide to the Bank for Real Estate
acquired after the Closing Date at the Company's expense: (i) evidence
satisfactory to the Bank (including at the Bank's request a loan policy of title
insurance in favor of the Bank) showing that such Real Estate is owned in fee
simple by the Company free and clear of all liens, encumbrances and exceptions
which are not acceptable to the Bank; and (ii) a Phase I environmental
assessment (and where reasonably deemed appropriate by the Bank based upon
information disclosed in such assessment, a Phase LI environmental assessment)
prepared in favor of the Bank by a registered engineer or environmental
consultant acceptable to the Bank confirming there are no material environmental
problems associated with such Real Estate.
ARTICLE V
Affirmative and
Negative Covenants of Company
Section 5.01. Affirmative Covenants of the Company. Unless otherwise
agreed by the Bank in a prior written document, until all Obligations of the
Company terminate or are paid and satisfied in full, and for so long as the
Company' is entitled to receive any Advance, the Company shall strictly observe
each of the following covenants:
(a) Existence. The Company shall preserve and maintain its corporate
existence and the right to do business in Indiana, Mississippi, and in such
other states where the failure to quality' and maintain qualification could have
a Materially Adverse Effect.
(b) Reports. Certificates and Other Information. The Company shall furnish
to the Bank the following Financial Statements, certificates and other
information, in form satisfactory to the Bank:
(1) Annual Statements. As soon as available and in any event within
one hundred and twenty (120) days after the close of each fiscal year of
the Company and of OCP, annual audited Financial Statements for the Company
and OCP, audited by the Company's Auditors, showing the financial condition
and results of operations of the Company and OCP as at the close of such
fiscal year and for such fiscal year, all prepared in accordance with GAAP,
accompanied by an opinion of the Company's Auditors, which opinion shall be
without qualification and shall state that such audited Financial
Statements present fairly the financial position of the Company or OCP as
of the date of such Financial Statements and the results of its operations
and changes in its financial position for the period covered thereby, and
that their examination in connection with such Financial Statements has
been made in accordance with GAAP.
(2) Interim Monthly Statements. As soon as available and in any event
within thirty (30) days after the end of each calendar month ending after
the Closing Date, unaudited consolidated Financial Statements for the
Company showing its financial condition and results of operations as at,
and for such calendar month and year-to-date, all in reasonable detail, and
certified to the Bank by an Authorized Officer. Such Financial Statements
shall be provided with comparable prior year-to-date Financial Statements
as at the end of the same calendar month of the prior year (beginning in
fiscal year 2002).
(3) Annual and Monthly Officer's Certificates. Contemporaneously with
the furnishing of each set of Financial Statements of the Company provided
for in Sections 5.01(b)(l) and (2), above, an Officer's Certificate.
(4) Orders. Prompt notice of any orders in any material proceedings to
which the Company is a party, issued by any court or regulatory agency,
federal or state, and if the Bank should so request, a copy of any such
order.
(5) Notice of Default or Litigation. Immediately upon learning of the
occurrence of an Event of Default or Unmatured Event of Default, or the
institution of or any adverse determination in any litigation, arbitration
proceeding or governmental proceeding which is material to the Company or
the occurrence of any event which could have a Materially Adverse Effect,
written notice thereof describing the same and the steps being taken with
respect thereto.
(6) Accounts Receivable Reports. Within thirty (30) days after the end
of each calendar month ending after the Closing Date, a certified report of
the accounts receivable of the Company as of the end of such month, with
agings for the accounts receivable and with such report otherwise to be in
such form and provide such detail as may be reasonably satisfactory to the
Bank.
(7) Monthly Borrowing Base Certificates and Compliance Certificates.
Within thirty (30) days after the last Banking Day of the last calendar
week of each calendar month, and at the time of each Application for
Advance if at such time more than thirty (30) days has elapsed since the
Company submitted a Borrowing Base Certificate: (i) a completed Borrowing
Base Certificate, certified to the Bank by an Authorized Officer, setting
forth a computation of the Borrowing Base as of the last day of the period
covered thereby and, if the Bank so requests, specifying the locations of
the all Eligible Inventory listed thereon; and (ii) a certificate, signed
by an Authorized Officer, certifying compliance by the Company with the
financial covenants set forth in Section 5.0 1(g) of this Agreement, and
providing a detailed calculation of each of such covenants as of the date
of such certificate.
(8) 0CC Tax Returns. Within fifteen (15) days of the filing thereof,
copies of each federal tax return of 0CC.
(9) SerVaas Inventory Reports. At the same time such reports are
provided to SerVaas, Inc., copies of all sales reports and Certificates of
Consigned Goods Status given to SerVaas, Inc. pursuant to the SerVaas
Inventory Agreement.
(10) Other Information. From time to time such other information, data
and documents concerning the Company, OCP or 0CC as the Bank may reasonably
request.
(c) Books, Records and Inspections. The Company shall maintain complete and
accurate books and records, and permit access thereto by the Bank for purposes
of inspection, copying and audit, and the Company shall permit the Bank to
inspect its properties and operations at all reasonable times and upon
reasonable notice.
(d) Maintenance of Property: Insurance. Keep all material property useful
and necessary in its business in good working order and condition (ordinary wear
and tear excepted); maintain with financially sound and reputable insurance
companies insurance on all its material property (including without limitation
its material tangible Collateral) in at least such amounts and against at least
such risks as are usually insured against in the same general area by companies
engaged in the same or a similar business, and as otherwise may be required by
law or by any of the Loan Document; and furnish to the Bank, upon written
request, full information as to the insurance carried.
(e) Taxes and Liabilities. The Company shall pay when due all taxes,
license fees, assessments and other liabilities except such as are being
contested in good faith and by appropriate proceedings and for which appropriate
reserves have been established.
(f) Compliance with Legal and Regulatory Requirements. The Company shall
maintain material compliance with the applicable provisions of all federal,
state and local statutes, ordinances and regulations and any court orders or
orders of regulatory authorities issued thereunder.
(g) Financial Covenants. The Company shall observe each of the following
financial covenants:
(1) Minimum Tanaible Capital Base. The Company shall maintain a
Tangible Capital Base (A) of not less than $1,450,000 as of the Closing
Date through and including December 30, 2001, (B) of not less than
$1,900,000 as of December 31, 2001, through and including December 30,
2002, (C) of not less than $2,450,000 as of December 31, 2002, through and
including December 30, 2003, and (D) of not less than $2,950,000 as of
December 31, 2003 and thereafter.
(2) Fixed Charge Coverage Ratio. The Company shall have a Fixed Charge
Coverage Ratio of 1.1 to 1 (A) as of the close of each fiscal quarter of
the Company ending after the December 31, 2000 and prior to December 31,
2001, for the period all such fiscal quarters ending on such close, and (B)
as of the close of each fiscal quarter ending on or after December 31,
2001, for the period of the four consecutive fiscal quarters which end on
such close.
(3) Ratio of Total Funded Debt to EBITDA. (A) As of the close of each
fiscal quarter of the Company ending after December 31, 2000 and prior to
December 31, 2001, and for the period of all such fiscal quarters which end
on such close, the Company shall have a Ratio of Total Funded Debt to
EBITDA of not greater than 3.75 to 1.0; (B) as of the close of each fiscal
quarter of the Company ending on or after December 31, 2001, and prior to
December 31, 2002, and for the period of the four consecutive fiscal
quarters which end on such close, the Company shall have a Ratio of Total
Funded Debt to EBITDA of not greater than 3.50 to 1.0; and (C) as of the
close of each fiscal quarter of the Company ending on or after December 31,
2002, and for the period of the four consecutive fiscal quarters which end
on such close, the Company shall have a Ratio of Total Funded Debt to
EBITDA of not greater than 3.00 to 1.0.
(h) Primary Banking Relationship. The Company and each of its Subsidiaries
shall maintain its primary concentration and deposit accounts with the Bank.
(i) Employee Benefit Plans. The Company shall maintain any Plan in material
compliance with ERISA, the Code, and all rules and regulations of regulatory
authorities pursuant thereto and shall file all reports required to be filed
pursuant to ERISA. the Code, and such rules and regulations.
(j) Hazardous Substances. If the Company should commence the use,
treatment, transportation, generation, storage or disposal of any Hazardous
Substance in reportable quantities in its operations in addition to those (if
any) noted in Schedule 5.010) attached to this Agreement, the Company shall
immediately notify the Bank of the commencement of such activity with respect to
each such Hazardous Substance. The Company shall cause any Hazardous Substances
which are now or may hereafter be used or generated in the operations of the
Company in reportable quantities to be accounted for and disposed of in
compliance with all Environmental Laws and other applicable federal, state and
local laws and regulations. The Company shall notify the Bank immediately upon
obtaining knowledge that:
(1) any premises which have at any time been owned or occupied by or
have been under lease to the Company are the subject of an environmental
investigation by any federal, state or local governmental agency having
jurisdiction over the regulation of any Hazardous Substances, the purpose
of which investigation is to quantify the levels of Hazardous Substances
located on such premises, or
(2) the Company has been named or is threatened to be named as a party
responsible for the possible contamination of any real property or
groundwater with Hazardous Substances, including, but not limited to the
contamination of past and present waste disposal sites.
If the Company is notified of any event described in Sections 5.01(j)(l) or
(2) above, the Company shall immediately engage a firm or firms of engineers or
environmental consultants appropriately qualified to determine as quickly as
practical the extent of contamination and the potential financial liability of
the Company with respect thereto, and the Bank shall be provided with a copy of
any report prepared by such firm or by any governmental agency as to such
matters as soon as any such report becomes available to the Company, and Company
shall immediately establish reserves in the amount of the potential financial
liability of the Company identified by such environmental consultants or
engineers. The selection of any engineers or environmental consultants engaged
pursuant to the requirements of this Section shall be subject to the approval of
the Bank, which approval shall not be unreasonably withheld or delayed.
(k) Leases. The Company shall maintain in full force and effect, without
any defaults by the Company thereunder, all leases of Real Estate upon which any
of its respective facilities are located, and shall immediately notify the Bank
in writing of any notice of default or other notice or event which may adversely
affect continued occupancy and other rights under any of such leases by the
Company. The Company shall cause the interests of any lessees of the Company's
Real Estate to be subordinated to the Liens of the Bank under subordination
agreements in form and substance satisfactory to the Bank.
(1) Name Change. Not later than fifteen (15) days following the Closing
Date, the Company shall provide to the Bank evidence satisfactory to the Bank
that it has amended its Articles of Incorporation and its Mississippi
certificate of authority to reflect the change of its name to "U.S. Rubber
Reclaiming, Inc.".
(n) Title Insurance. Not later than ninety (90) days following the Clositig
Date, the Company shall cause to be issued to the Bank an endorsement of the
title policy provided pursuant to Section 6.0 1(B)(9) deleting the exception for
matters that would be disclosed by a current survey.
(m) Mississippi Business Finance Corporation. Not later than thirty (30)
days following the Closing Date, the Company shall deliver to the Bank evidence
satisfactory to the Bank that all Liens of the Mississippi Business Finance
Corporation against the Company's property have been released of record.
Section 5.02. Negative Covenants of the Company. Unless otherwise agreed by
the Bank in a prior written document, until all Obligations of the Company
terminate or are paid and satisfied in full, and so long as the Company is
entitled to receive any Advance, the Company shall strictly observe each of the
following covenants:
(a) Restricted Payments. Without the prior written consent of the Bank, the
Company shall not purchase or redeem any shares of the capital stock of the
Company, or declare or pay any dividends thereon. The Company shall not make any
other distributions to shareholders as shareholders, or set aside any funds for
any such purpose, or prepay, purchase or redeem any Subordinated Debt of the
Company.
(b) Liens. The Company shall not, without the prior written consent of
Bank, create or permit to exist any Lien with respect to any property or assets
now owned or hereafter acquired by it, including, without limitation any of its
rights, title and interests in and to any real estate, whether leased or owned,
except:
(1) Liens in favor of the Bank created pursuant to the requirements of
this Agreement, or otherwise;
(2) any Lien or deposit with any governmental agency required or
permitted to qualify the Company to conduct business or exercise any
privilege, franchise or license, or to maintain self-insurance or to obtain
the benefits of or secure obligations under any law pertaining to worker's
compensation, unemployment insurance, old age pensions, social security or
similar matters, or to obtain any stay or discharge in any legal or
administrative proceedings, or any similar lien or deposit arising in the
ordinary course of business;
(3) any mechanic's, worker's, repairmen's, carrier's, warehousemen's
or other like Liens arising in the ordinary course of business for amounts
not yet due and for the payment of which adequate reserves have been
established, or deposits made to obtain the release of such Liens;
(4) easements, licenses, minor irregularities in title or minor
encumbrances on or over any real property which do not, in the judgment of
the Bank, materially detract from the value of such property or its
marketability or its usefulness in the business of the Company;
(5) Liens for taxes and governmental charges which are not yet due or
which are being contested in good faith and by appropriate proceedings and
for which appropriate reserves have been established;
(6) Liens created by or resulting from any litigation or legal
proceeding which is being contested in good faith and by appropriate
proceedings and for which appropriate reserves have been established; and
(7) those specific Liens now existing (if any) described on Schedule
5.02(b)(7) attached to this Agreement.
(c) Guaranties. The Company shall not be a guarantor or surety of, or
otherwise be responsible in any manner with respect to any undertaking of any
other Person, whether by guaranty agreement or by agreement to purchase any
obligations, stock, assets, goods or services, or to supply or advance any
funds, assets, goods or services, or otherwise, except for:
(1) guaranties in favor of the Bank; and
(2) guaranties by endorsement of instruments for deposit made in the
ordinary course of business.
(d) Loans or Advances. The Company shall not, without the prior written
consent of Bank, make or permit to exist any loans, advances or extensions of
credit by it to any other Person, except for:
(1) extensions of credit or credit accommodations to customers or
vendors made in the ordinary course of its business;
(2) reasonable salary advances to non-executive employees, and other
advances to agents and employees for anticipated expenses to be incurred on
its behalf in the course of discharging their assigned duties; and
(3) the specific existing items listed on Schedule 5.02(d)(3) attached
to this Agreement.
(e) Mergers, Consolidations, Sales, Acquisition or Formation of
Subsidiaries. Except for the Acquisition, the Company shall not (i) be a party
to any consolidation or to any merger or purchase the capital stock of or
otherwise acquire any equity interest in any other business entity, (ii) acquire
any material part of the assets of any other business entity, except in the
ordinary course of business, or (iii) sell, transfer, convey or lease all or any
material part of its assets, except in the ordinary course of business. The
Company shall not cause to be created or otherwise acquire any Subsidiary
without the prior written consent of the Bank.
(f) Margin Stock. The Company shall not use or cause or permit the proceeds
of the Loans to be used, either directly or indirectly, for the purpose. whether
immediate, incidental or ultimate, of purchasing or carrying any margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System, as amended from time to time.
(g) Other Agreements. The Company shall not enter into any agreement
containing any provision which would be violated or breached in material respect
by the performance of its obligations under this Agreement or under any other
Loan Document. The Company shall not amend or modify or agree to any amendment
or modification of the SerVaas Note or the SerVaas Inventory Agreement without
the express written consent of the Bank.
(h) Judgments. The Company shall not permit any uninsured judgment or
monetary penalty rendered against it in any judicial or administrative
proceeding to remain unsatisfied for a period in excess of forty-five (45) days
unless such judgment or penalty is being contested in good faith by appropriate
proceedings and execution upon such judgment has been stayed, and unless an
appropriate reserve has been established with respect thereto.
(i) Change Name/Location of Principal Office. Except as contemplated by
Section 5.0 1(1), the Company shall not change its legal name, the jurisdiction
of its organization, or the location of its principal office unless it gives not
fewer than sixty (60) days~ prior written notice of such change to the Bank.
(j) Hazardous Substances. The Company shall not allow or permit to continue
the release or threatened release of any Hazardous Substance in violation of any
Environmental Laws on any premises owned or occupied by or under lease to it.
(k) Debt. The Company shall not, without the prior written consent of Bank,
incur nor permit to exist any Debt except (i) to the Bank, (ii) the Debt
obligations identified on Schedule 5.02(k) attached to this Agreement, and (iii)
Subordinated Debt.
(l) Negative Pledge Limitation. The Company shall not enter into any
agreement with any person, other than the Bank, which prohibits or limits its
ability to create, incur, assume, or suffer to exist in favor of the Bank any
Lien upon any of its assets, rights, revenues, or property, real, personal, or
mixed, tangible or intangible, whether now owned or hereafter acquired.
(m) Accounting Policies/Change of Business. The Company shall not: (1)
change its fiscal year or any of its significant accounting policies except to
the extent necessary to comply with GAAP; and (2) make any material change in
the nature of its business as carried on as of the Closing Date (after giving
effect to the Acquisition).
(n) Management Fees. The Company shall not pay, nor enter into any contract
or other commitment which obligates it to pay any management fees, consulting
fees, administrative service fees or any other similar fee or charge to any
Person, including OCP, 0CC or any other Affiliate of the Company, except with
the prior written consent of the Bank. The Bank hereby consents to the payment
of the management fees provided for in that certain Management Agreement dated
December 29, 2000, between the Company and 0CC; however, the Company shall not
pay any management fee thereunder at any time a Default or Event of Default has
occurred and is continuing, or would occur as a result of the payment of such
management fees.
(o) Limitation on Compensation. The Company shall not pay or become
obligated to pay any compensation, including salaries, bonuses or fees of any
kind, to: (i) OCP; or (ii) any officer, director, employee or insider (as that
term is defined in the United States Bankruptcy Code) of the Company who is also
an officer, director or employee of 0CC, OCP or of any of its Subsidiaries or
Affiliates; or (iii) to any Person as compensation for employment services or
consulting or administrative services not performed at the Vicksburg,
Mississippi offices and facilities of the Company.
(p) Prohibited Use of Loans. No portion of any Advance or any Loan made
hereunder shall be used directly or indirectly to purchase ineligible
securities, as defined by applicable regulations of the Federal Reserve Board,
which are underwritten by BOC during the underwriting period and for the thirty
(30) days thereafter, or shall be used for any purpose not expressly permitted
under Article II of this Agreement.
ARTICLE VI
Lending Conditions
Section 6.01. Conditions of Lending. The obligation of the Bank to make
any Advance of the Revolving Loan or the Equipment Loan or to advance the
proceeds of Term Loan I or Term Loan II shall be subject to fulfillment of each
of the following conditions precedent:
(a) No Default. No Event of Default or Unmatured Event of Default shall
have occurred and be continuing, and the representations and warranties of the
Company contained in Section 3.01 of this Agreement shall be true and correct as
of the date of this Agreement and as of the date of each Advance, except that
after the date of this Agreement all representations will be construed to have
been amended to conform with any changes of which the Bank shall previously have
been given notice in writing by the Company.
(b) Documents and other Items to be Furnished at Closing. The Bank
shall have received contemporaneously with the execution of this Agreement, the
following, each duly executed by the parties or intended signatories thereto,
currently dated (as applicable) and in form and substance satisfactory to the
Bank:
(1) The Notes, the Security Agreement, the Mortgage, the Capital
Contribution Agreement, the SerVaas Subordination Agreement, and the
Intercreditor Agreement.
(2) A copy of the Written Consent Resolutions of the Board of
Directors of the Company authorizing the execution and delivery, on behalf
of the Company, of this Agreement and the other Loan Documents provided for
in this Agreement to which the Company is a party, certified by the
Secretary of the Company.
(3) A certificate of the Secretary of the Company certifying the names
of the officer or officers authorized to sign this Agreement and the other
Loan Documents provided for in this Agreement to which the Company is a
party, for and on behalf of the Company.
(4) A copy of the Written Consent Resolutions of the general partner
of OCP authorizing the execution and delivery, on behalf of OCP of the
Capital Contribution Agreement, certified by the Managing Member of the
general partner of OCP.
(5) A certificate of the Managing Member of the general partner of OCP
certifying the names of the officer authorized to sign the Loan Documents
to be executed by OCP, for and on behalf of OCP.
(6) Certificates of Existence for the Company and 0CC and a
Certificate of Authorization for OCP issued by the Indiana Secretary of
State.
(7) Copies of (i) the Articles of Incorporation of the Company and
Articles of Organization of 0CC, each certified by the Indiana Secretary of
State, (ii) the Certificate of Limited Partnership of OCP certified by the
Delaware Secretary of State, (iii) the current By-Laws for the Company,
certified by its Secretary, and (iv) the current Operating Agreement of
0CC, the current Limited Partnership Agreement of OCP, and the Confidential
Offering Memorandum for the Obsidian Capital Partners, L.P. Private
Placement of $10 Million Equity Fund, each certified by the Managing Member
of 0CC.
(8) A certificate of authority to transact business as a foreign
corporation for the Company, issued by the Mississippi Secretary of State.
(9) With respect to the Real Estate subject to the Mortgage, the
Company shall have provided to the Bank, at the Company's expense,
(i) a mortgagee's title insurance policy in the amount of
$1,150,000.00 on the American Land Title Association form of
mortgagee's title policy (1992 Revision), subject to the ALTA form of
Comprehensive Endorsement, and an ALTA form 3.0 or 3.1 zoning
endorsement. The coverage provided by the title insurance policy shall
not be subject to the standard exceptions as to rights of parties in
possession, easements not shown by the public records and mechanic's
liens not shown by the public records, and otherwise the coverage
shall be subject to no exceptions other than (A) easements and use
restrictions and encroachments disclosed by survey which do not
materially and adversely affect the value or marketability of the Real
Estate or the usefulness of the Real Estate in the operations of the
Company, and (B) Liens described in Section 5.02(b) (1) through (7).
(ii) an appraisal report addressed to the Bank prepared in
compliance with the regulations of the Office of the Comptroller of
the Currency with respect to appraisal practice applicable to
"federally related transactions" adopted pursuant to the Financial
Institutions Reform, Recovery and Enforcement Act of 1989 showing that
the Real Estate has a value of not less than $1,000,000.00, which
shall be prepared in response to an engagement letter to be issued by
the Bank;
(iii) the report or reports of a registered engineer or
environmental consultant acceptable to the Bank, confirming that there
are no material environmental problems associated with such Real
Estate, which shall be in form satisfactory to the Bank and shall
include, at a minimum: A) a statement of the results of an examination
of all relevant documents and records concerning ownership and use of
the Real Estate; B) a statement of the results of an inspection of the
Real Estate, which inspection shall have included the use of such
equipment as is customarily used by engineers and environmental
consultants in connection with the preparation of "Phase I"
environmental reports to detect traces of buried Hazardous Substances
and underground storage tanks and drums and which inspection shall
have been made for the purpose of determining whether all or any part
of the Real Estate is being used or has been used to store or dispose
of any Hazardous Substances in quantities which are or could be
detrimental to the Real Estate, human health or the environment or in
violation of any laws or regulations, state or federal, whether the
Real Estate is or has been affected by any Hazardous Substances and
whether the Real Estate contains or has contained any underground
storage tanks or asbestos of any kind, and a statement of the
recommendations of the reporting engineer or consultant as to such
further investigation or tests, if any, as may be necessary to resolve
such issues; C) confirmation that the Real Estate is not listed as a
known hazardous waste site on any environmental reporting list
maintained by any governmental agency having jurisdiction as to
environmental matters over the Real Estate, and D) a statement of the
professional qualifications of the engineer or consultant who prepared
such report. The Company shall also furnish to the Bank the
supplemental report of the reporting engineer or consultant as to the
results of such further tests and investigations as may have been
recommended in the initial report;
(iv) a Minimum Standards Detail Land Title Survey together with a
Minimum Standards Detail Certificate prepared by a registered land
surveyor or engineer dated within thirty (30) days preceding closing,
which survey shall locate all recorded easements with recording
information and contain a statement as to whether or not the Real
Estate is in a flood plain; and
(v) a completed Flood Hazard Determination Form from a registered
land surveyor or engineer pursuant to the requirements of the Office
of the Comptroller of the Currency and the Federal Emergency
Management Agency.
(10) Uniform Commercial Code financing statements in such form and for
filing in such jurisdictions as the Bank may request from the Company, duly
signed by the Company.
(11) A Borrowing Base Certificate, an Application for Advance for each
Advance to be made under the Revolving Loan and the Equipment Loan on the
Closing Date, and an Officer's Certificate.
(12) An audit of the Collateral, satisfactory in all respects to the
Bank.
(13) Evidence satisfactory to the Bank of the identities of the
limited partners of OCP, and that the general partner and limited partners
of OCP have made binding commitments to contribute capital to OCP in an
aggregate amount not less than $8,100,000.00.
(14) Evidence satisfactory to the Bank of the consummation of the
Acquisition upon terms and conditions that are satisfactory in all respects
to the Bank; and copies of the executed Acquisition Documents.
(15) Payment to the Bank of the commitment fee for the Loans in an
aggregate amount of $46,500.00, which fees have been fully earned and shall
be non-refundable.
(16) Payment to the Bank of reimbursement for all costs and expenses
incurred by the Bank in the preparation and closing of the Loan Documents
and in the making of the Loans, including but not limited to all of its
reasonable attorneys' fees.
(17) An opinion, or opinions, of counsel for the Company, OCP and 0CC
(which shall include, but not be limited to, an opinion of the Company's
Mississippi counsel) addressed to the Bank in form and substance as may be
reasonably acceptable to the Bank and its counsel.
(18) Such other documents, certificates, agreements and/or information
as the Bank may reasonably require.
(c) Documents to be Furnished at Time of Each Advance. The Bank shall have
received the following prior to making any Advance, each duly executed and
currently dated, unless waived at the Bank's discretion as provided in Section
2.01(b) of this Agreement:
(1) An Application for Advance;
(2) If an Advance under the Revolving Loan, a Borrowing Base
Certificate (if the most recent Borrowing Base Certificate provided to the
Bank is more than 7 days old):
(3) An Officer's Certificate; and
(4) Such other documents as the Bank may reasonably require.
ARTICLE VII
Events of Default--Acceleration
Section 7.01. Events of Default. Each of the following shall constitute an
Event of Default under this Agreement:
(a) Nonpayment of the Loans. Default in the payment when due of any amount
payable under the terms of any of the Notes, or otherwise payable to the Bank or
any other holder of any of the Notes under the terms of this Agreement.
(b) Nonpayment of Other Debt. Default by the Company, OCP or 0CC in the
payment when due, whether by acceleration or otherwise, of any other Debt for
borrowed money, or default in the performance or observance of any obligation or
condition with respect to any such other Debt if the effect of such default is
to accelerate the maturity of such other Debt or to permit the holder or holders
thereof, or any trustee or agent for such holders, to cause such Debt to become
due and payable prior to its scheduled maturity, unless the Company, OCP, or
0CC, as applicable, is contesting the existence of such default in good faith
and by appropriate proceedings.
(c) Other Material Obligations. Subject to the expiration of any applicable
grace period, default by the Company, OCP, or 0CC in the payment when due, or in
the performance or observance of any material obligation of, or condition agreed
to by the Company, OCP, or 0CC with respect to any agreement respecting any
material purchase, sale or lease of goods, securities or services except only to
the extent that the existence of any such default is being contested in good
faith and by appropriate proceedings and that appropriate reserves have been
established with respect thereto.
(d) Bankruptcy, Insolvency. etc. The Company, OCP or 0CC admitting in
writing its inability to pay its debts as they mature or an administrative or
judicial order of dissolution or determination of insolvency being entered
against the Company, OCP or 0CC; or the Company, OCP, or 0CC applying for,
consenting to, or acquiescing in the appointment of a trustee or receiver for
the Company, OCP or 0CC or any property thereof, or the Company, OCP or 0CC
making a general assignment for the benefit of creditors; or, in the absence of
such application, consent or acquiescence, a trustee or receiver being appointed
for the Company, OCP or 0CC or for a substantial part of the property of the
Company, OCP or 0CC and not being discharged within sixty (60) days; or any
bankruptcy, reorganization, debt arrangement, or other proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding being
instituted by or against the Company, OCP or 0CC, and, if involuntary, being
consented to or acquiesced in by the Company, OCP or 0CC, as applicable, or
remaining for sixty (60) days undismissed.
(e) Warranties and Representations. Any warranty or representation made by
the Company, OCP or 0CC in this Agreement, or any of the other Loan Documents,
proving to have been false or misleading in any material respect when made, or
any schedule, certificate, financial statement, report, notice, or other writing
furnished by the Company, OCP or 0CC to the Bank proving to have been false or
misleading in any material respect when made or delivered.
(f) Violations of Negative and Financial Covenants. Failure by the Company
to comply with or perform any covenant stated in Section 5.0 1(g) or Section
5.02 of this Agreement.
(g) Change of Control. There shall be a Change of Control of the Company,
or a Change of Control of OCP, without the prior written consent of the Bank.
(h) Noncompliance With Other Provisions of this Agreement. Failure of the
Company or OCP to comply with or perform any covenant or other provision of this
Agreement or any of the other Loan Documents (including without limitation the
Capital Contribution Agreement) or to perform any other Obligation (which
failure does not constitute an Event of Default under any of the preceding
provisions of this Section 7.01) and continuance of such failure for five (5)
days after actual receipt of notice thereof by the Company from the Bank.
(i) Noncompliance With Other Loan Documents. The occurrence of any "Event
of Default" or "Default" (as such terms are defined in any of the Loan Documents
other than this Agreement).
(j) Default on other Bank One 0bligations. The Company, OCP or 0CC shall
default in the payment or performance of any Debt to the Bank other than the
Obligations.
(k) Restrictions on Contributions. (i) OCP shall create or suffer to exist
(A) any restriction or limitation (contractual or otherwise) on the right or
ability of OCP to make contributions, loans, advances, or extensions of credit,
or otherwise to transfer funds to or for the benefit of the Company, other than
the limitations set out in Section 2.04(g) of the OCP's Limited Partnership
Agreement dated July 14, 2000, as it exists on the Closing Date; or (B) any Lien
on OCP rights, title and interest under any subscription agreement or other
agreement between OCP and any third party whereby such third party subscribes to
purchase limited partnership interests in OCP, other than the Provident Pledge
Agreement; or (ii) the total amount of credit and financial accommodations
extended by The Provident Bank to OCP (including all commitments to lend)
exceeds at any time the sum of $1,500,000.00.
Section 7.02. Effect of Event of Default. If any Event of Default described
in Section 7.01(d) of this Agreement shall occur, maturity of each of the Loans
shall immediately be accelerated and each of the Notes and the Loans evidenced
thereby, and all other indebtedness and any other payment Obligations of the
Company to the Bank shall become immediately due and payable, and the obligation
of the Bank to make any Advance shall immediately terminate, all without notice
of any kind. When any other Event of Default has occurred and is continuing, the
Bank or any other holder of the Notes may accelerate payment of the Loans and
declare the Notes and all other payment Obligations due and payable, whereupon
maturity of each of the Loans shall be accelerated and each of the Notes and the
Loans evidenced thereby, and all other payment Obligations shall become
immediately due and payable and the obligation of the Bank to make any Advance
shall immediately terminate, all without notice of any kind. The Bank or such
other holder shall promptly advise the Company of any such declaration, but
failure to do so shall not impair the effect of such declaration. The remedies
of the Bank specified in this Agreement or in any other Loan Document shall not
be exclusive, and the Bank may avail itself of any other remedies provided by
law as well as any equitable remedies available to the Bank.
ARTICLE VIII
Miscellaneous
Section 8.01.. Waiver -- Amendments. No delay on the part of the Bank,
or any holder of any of the Notes in the exercise of any right, power or remedy
shall operate as a waiver thereof, nor shall any single or partial exercise by
any of them of any right, power or remedy preclude any other or further exercise
thereof, or the exercise of any other right. power or remedy. No amendment,
modification or waiver of, or consent with respect to any of the provisions of
this Agreement or the other Loan Documents or otherwise of the Obligations shall
be effective unless such amendment, modification, waiver or consent is in
writing and signed by the Bank.
Section 8.02. Notices. Any notice given under or with respect to this
Agreement to the Company or the Bank shall be in writing and, if delivered by
hand or sent by overnight courier service, shall be deemed to have been given
when delivered and, if mailed, shall be deemed to have been given five (5) days
after the date when sent by registered or certified mail, postage prepaid, and
addressed to the Company or the Bank (or other holder of the Notes) at its
address shown below, or at such other address as any such party may, by written
notice to the other party to this Agreement, have designated as its address for
such purpose. The addresses referred to are as follows:
The Company: USRR Acquisition Corp.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: President
With a copy to: Obsidian Capital Partners, L.P.
c/o Obsidian Capital Company, LLC
Suite 3680 Bank One Tower
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
The Bank: Bank One, Indiana, National Association
000 Xxxxxxxx Xxxxxx, xXx -0044
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
Section 8.03. Costs, Expenses and Taxes. The Company agrees to pay
(without duplication), all of the following fees, costs and expenses incurred by
the Bank: (i) all reasonable costs and expenses in connection with the
negotiation, preparation, printing, typing, reproduction, execution and delivery
of the Loan Documents and any and all other documents furnished pursuant hereto
or in connection herewith, including without limitation the reasonable fees and
out-of-pocket expenses of Messrs. Xxxxx & Xxxxxxx, special counsel to the Bank,
as well as the fees and out-of-pocket expenses of such counsel in connection
with the foregoing and the administration of this Agreement, (ii) all reasonable
costs and expenses in connection with the negotiation, preparation, printing,
typing, reproduction, execution and delivery of any amendments or modifications
of(or supplements to) any of the foregoing and any and all other documents
furnished pursuant thereto or in connection therewith, including without
limitation the reasonable fees and out-of-pocket expenses of counsel retained by
the Bank relative thereto (or, but not as well as, the reasonable allocated
costs of staff counsel), (iii) all UCC and Lien search fees, all title
insurance, survey, appraisal, environmental evaluation fees, costs, and
expenses, and costs and all fees and taxes payable in connection with the filing
or recording of any Loan Documents or financing statements; (iv) all costs and
expenses (including, without limitation, reasonable attorneys' fees and expenses
of the Bank), if any, in connection with the enforcement of this Agreement
and/or any other Loan Documents or other agreement furnished pursuant hereto or
thereto or in connection herewith or therewith; and (v) all costs and expenses
incurred by the Bank in conducting an independent audit or review by the Bank's
internal staff of the books and records of the Company and the collateral
provided under the Loan Documents. In addition, the Company shall pay any and
all stamp, transfer and other similar taxes payable or determined to be payable
in connection with the execution and delivery of this Agreement, or any of the
other Loan Documents, or the issuance of the Notes, or the making of the Loans,
and agrees to save and hold the Bank harmless from and against any and all
liabilities with respect to or resulting from any delay in paying, or omission
to pay, such taxes. Any portion of the foregoing fees, costs and expenses which
remains unpaid following the Bank's statement and request for payment thereof
shall bear interest from the date of such statement and request to the date of
payment at a per annum rate equal to the Prime Rate plus Four Percent (4%) per
annum.
Section 8.04. Severability. If any provision of this Agreement or any
other Loan Document is determined to be illegal or unenforceable, such provision
shall be deemed to be severable from the balance of the provisions of this
Agreement or such Loan Document and the remaining provisions shall be
enforceable in accordance with their terms.
Section 8.05. Captions/Time of Essence/Miscellaneous. Section captions
used in this Agreement are for convenience only and shall not affect the
construction of this Agreement. Time is of the essence under the Loan Documents.
This Agreement may be executed by original or facsimile signatures (which shall
be binding and enforceable the same as if original), in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one agreement.
Section 8.06. Governing Law. Except as may otherwise be expressly
provided in any other Loan Document, this Agreement and all other Loan Documents
are made under and will be governed in all cases by the substantive laws of the
State of Indiana, notwithstanding the fact that Indiana conflicts of laws, rules
or principles might otherwise require the substantive rules of law of another
jurisdiction to apply. THE COMPANY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON THE COMPANY AND AGREES THAT ALL SERVICE OF PROCESS MAY BE MADE BY
MESSENGER, BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY REGISTERED MAIL
DIRECTED TO THE COMPANY AT THE ADDRESS STATED IN SECTION 8.02 OF THIS AGREEMENT.
NOTHING CONTAINED IN THIS SECTION SHALL AFFECT THE RIGHT OF THE BANK TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
Section 8.07. Prior Agreements, Etc. This Agreement supersedes all
previous agreements and commitments made by the Bank and the Company with
respect to the Loans and all other subjects of this Agreement, including,
without limitation, any oral or written proposals or commitments made or issued
by the Bank. The Company agrees to indemnify and hold harmless the Bank from and
against all liabilities, obligations, losses, damages, penalties, action,
judgments, suits, costs (including attorneys' fees), expenses or disbursements
of any kind whatever which may be imposed upon or asserted against the Bank in
any way relating to the business operations of the Company, OCP or 0CC,
execution of this Agreement or any other of the Loan Documents or the
performance of its obligations thereunder. It is expressly agreed that the Bank
shall not be deemed to control the business activities of the Company as a
result of this Agreement, the other Loan Documents or the performance thereof.
Section 8.08. Successors and Assigns. This Agreement and the other Loan
Documents shall be binding upon and shall inure to the benefit of the Company
and the Bank and their respective heirs, successors and assigns, provided that
the Company's rights under this Agreement shall not be assignable without the
prior written consent of the Bank.
The Company agrees that the Bank may at any time sell, assign, or transfer one
or more interests or participations in all or any part of its rights or
obligations in respect of the Loans to one or more purchasers or participants
whether or not related to the Bank, without prior notice to or the consent of
the Company. The Company agrees that the Bank may provide any information the
Bank may have about the Company or about any matter relating to the Loans to
BOC, or any of its subsidiaries or affiliates or their successors, or to any one
or more purchasers or potential purchasers of any of the Notes, or participants
or potential participants in any of the Loans.
Section 8.09. Waiver of Jury Trial/Jurisdiction. THE COMPANY AND THE
BANK EACH HEREBY VOLUNTARILY, KNOWINGLY, ABSOLUTELY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY TRIAL OR HAVE A JURY PARTICIPATE
IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE)
BETWEEN OR AMONG THE BANK AND THE COMPANY ARISING OUT OF OR IN ANY WAY RELATED
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY RELATIONSHIP BETWEEN THE
COMPANY AND THE BANK. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO
PROVIDE THE FINANCING DESCRIBED IN THIS AGREEMENT OR IN THE OTHER LOAN
DOCUMENTS.
NEITHER THE COMPANY NOR THE BANK WILL SEEK TO CONSOLIDATE ANY SUCH
ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL HAS NOT BEEN OR CANNOT BE WAIVED. THE COMPANY AGREES THAT THE COURTS
OF THE STATE OF INDIANA LOCATED IN INDIANAPOLIS, INDIANA, AND THE FEDERAL COURTS
LOCATED IN THE SOUTHERN DISTRICT OF INDIANA, INDIANAPOLIS DIVISION, HAVE
JURISDICTION OVER ANY AND ALL ACTIONS AND PROCEEDINGS INVOLVING THIS CREDIT
AGREEMENT OR ANY OTHER AGREEMENT MADE IN CONNECTION HEREWITH AND THE COMPANY
HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES TO SUBMIT TO THE JURISDICTION OF
SUCH COURTS FOR PURPOSES OF ANY SUCH ACTION OR PROCEEDING. THE COMPANY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION THAT THE COMPANY MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING, INCLUDING ANY
CLAIM THAT SUCH COURT IS AN INCONVENIENT FORUM, AND CONSENTS TO SERVICE OF
PROCESS PROVIDED THE SAME IS IN ACCORDANCE WITH THE TERMS HEREOF. FINAL JUDGMENT
IN ANY SUCH PROCEEDING AFTER ALL APPEALS HAVE BEEN EXHAUSTED OR WAIVED SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT.
Section 8.10. Highest Lawful Rate. Notwithstanding any provision to the
contrary contained in this Agreement or in any of the other Loan Documents, it
is expressly provided that in no case or event shall the aggregate of (a) all
interest on the unpaid balance of each of the Notes, accrued or paid from the
date hereof, and (b) the aggregate of any other amounts accrued or paid pursuant
to each of the Notes, or any of the other Loan Documents, which under applicable
laws are or may be deemed to constitute interest upon such Debt from the date
hereof, ever exceed the maximum rate of interest which could lawfully be
contracted for, charged or received on the unpaid principal balance of such
Debt. In this connection, it is expressly stipulated and agreed that it is the
intent of the Company and the Bank to contract in strict compliance with Indiana
usury laws and with any other applicable state usury laws and with federal usury
laws (whichever permit the higher rate of interest) from time to time in effect.
In furtherance thereof, none of the terms of this Agreement, each of the Notes
or any of the other Loan Documents shall ever be construed to create a contract
to pay, as consideration for the use, forbearance or detention of money,
interest at a rate in excess of the Highest Lawful Rate. Neither the Company nor
any other Person now or hereafter becoming liable for payment of indebtedness
pursuant to the Loan Documents (the "Bank Debt") shall ever be liable for
interest in excess of the Highest Lawful Rate. If under any circumstances the
aggregate amounts paid on the Bank Debt include amounts which by law are deemed
interest which would exceed the Highest Lawful Rate, the Company stipulates that
such amounts will be. deemed to have been paid as a result of an error on the
part of the Company and the Bank, and the Person receiving such excess payment
shall promptly, upon discovery of such error or upon notice thereof from the
Person making such payment, refund the amount of such excess. The parties
further stipulate that such refund shall be a sufficient and sole remedy for
such error and that no party shall be entitled to any damages or penalties,
whether statutory or otherwise, as a result of such error. In addition, all sums
paid or agreed to be paid to the holder or holders of the Bank Debt for the use,
forbearance or detention of the Bank Debt shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of the Bank Debt. The provisions of this Section 8.10 shall control all
agreements, whether now or hereafter existing and whether written or oral, among
the Company and the Bank.
Section 8.11. Indemnification. The Company agrees to indemnify the
Bank, and its successors and assigns (including any purchaser of a participation
in any of the Loans) and its directors, officers and employees, against all
losses, claims, costs, damages, liabilities and expenses, including, without
limitation, all expenses of litigation or preparation therefor (a "Loss"), which
they may pay or incur in connection with or arising out of the direct or
indirect application of the proceeds of any of the Loans, except for any Loss
incurred as the result of the gross negligence or willful misconduct of the
Bank, its successors or assigns, or its directors, officers or employees. The
indemnity set forth herein shall be in addition to the other Obligations of the
Company to the Bank under the Loan Documents or at common law or otherwise, and
shall survive termination of this Agreement, the expiration of the obligation of
the Bank to make Advances, and the payment of all other Obligations.
IN WITNESS WHEREOF, the Bank and the Company have by their respective
duly authorized officers executed and delivered this Agreement on the Closing
Date.
USRR ACQUISITION CORP.
By:/s/ Xxxxxxxxxxx Xxxxxx, Secretary
----------------------------------------------
Title :
---------------------------------------------
("Company")
BANK ONE, INDIANA, NATIONAL
ASSOCIATION
By:/s/ Xxxxxx X. Xxxxxxx, Vice President
----------------------------------------------
("Bank")
EXHIBIT A
APPLICATION FOR ADVANCE
Date:
BANK ONE, INDIANA, NA
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
We request an Advance in the amount of $__________ FOR VALUE on
_______________, ___ ("Requested Advance"), which Requested Advance shall be an
Advance on the [Revolving] [Equipment] Loan extended to us by you under and
pursuant to the Credit Agreement, dated as of December 29, 2000, between USRR
Acquisition Corp. (the "Company") and BANK ONE, INDIANA, NATIONAL ASSOCIATION
(the "Bank"), as amended and/or restated from time to time (the "Credit
Agreement").Terms which are defined in the Credit Agreement and which are not
otherwise defined in this Application shall when used in this Application have
the respective meanings ascribed to such terms in the Credit Agreement.
Please disburse the Requested Advance by crediting the amount thereof to
our Account No. _______________ maintained with the Bank.
We represent and warrant to the Bank that as of the date of this Advance
Request, and as of the date and time of our acceptance of the Requested Advance:
(a) Representations and Warranties. Each of the representations and
warranties contained in the Credit Agreement is and shall be true
and correct in all material respects at and as of such date and
time, as though made at and as of such date and time, and each of
the Loan Documents is and shall be in full force and effect at
and as of such date and time; and
(b) No Material Adverse Changes/No Event of Default. (i) There has
not been and there shall not have been any material adverse
change in the assets or condition (financial or otherwise) of the
Company at and as of such date and time, as such assets or
conditions are reflected in the Financial Statements which have
been most recently provided to the Bank pursuant to Section
5.01(b) of the Credit Agreement, and (ii) no Event of Default or
Unmatured Event of Default has occurred and is continuing or
shall have occurred and then be continuing at and as of such date
and time, or will occur after giving effect to the Requested
Advance.
Very truly yours,
USRR ACQUISITION CORP.
By:_____________________________
Printed:_________________________
Title:___________________________
[President, Chief Executive Officer or
Chief Financial Officer]
EXHIBIT B
BORROWING BASE CERTIFICATE
USRR ACQUISITION CORP. (the "Company"), in accordance with the
requirements of the Credit Agreement, dated as of December 29, 2000 (as amended
to date, "Credit Agreement"), between the Company, and Bank One, Indiana,
National Association (the "Bank"), hereby certifies to Bank One, Indiana,
National Association that: (a) the Company's Borrowing Base is ________, as
of______("Report Date"); (b) attached to this Borrowing Base Certificate is
supporting information and calculations showing the Company's determination of
the Borrowing Base as of the Report Date, and all figures and calculations
therein are true and correct as of the Report Date; (c) all Eligible Accounts
and Eligible Inventory reported therein are subject to a first priority,
perfected security interest in favor of the Bank; and (d) there has been no
material adverse change in the Eligible Accounts or Eligible Inventory since the
Report Date. Terms which are defined in the Credit Agreement shall have the same
meaning herein.
Date: ___________________
USRR ACQUISITION CORP.
By:
Its:
U.S. RUBBER RECLAIMING, INC.
BORROWING BASE CERTIFICATE
REPORTING DATE:
A. 1. Total Accounts Receivable ________
2. Less: Ineligible Accounts _________
a. Over 60 days past due _________
b. Insolvent debtor _________
c. Not invoiced _________
d. Not shipped _________
e. Contra accounts _________
f. Bank has no security interest _________
g. Due from affiliate _________
h. Evidenced by chattel paper/notes _________
i. Account with 25% > 60 days past due _________
3. Total Ineligible Accounts (Sum of a through i) ________
4. Eligible Accounts (Line 1 - Line 3) ________
5. 80% of Eligible Accounts (Line 4 X 80%) ________
B. 6. Total Raw Material and Finished Goods Inventory* ________
7. Less: Ineligible Inventory ________
a. Consigned _________
b. In transit/not on site _________
8. Total Ineligible Inventory (a + b) ________
9. Eligible Inventory (Line 6- Line 8) ________
10. 50% of Eligible Inventory (Line 9 X 50%) ________
C. BORROWING BASE (Line 5+ Line 10) ________
D. MAXIMUM AVAILABILITY** ________
F. AVAILABILITY (Line D - Line E)
* does not include Servaas inventory with a current value of: _____________
(attach most recent sales reports and Certficate of Consigned Goods Status)
** means the lesser of (i) the sum of $3,000,000.00, or (ii) the amount of the
Borrowing Base.
EXHIBIT C
CAPITAL CONTRIBUTION AGREEMENT
This CAPITAL CONTRIBUTION AGREEMENT ("Agreement") is made as
of the 29th day of December, 2000, by OBSIDIAN CAPITAL PARTNERS, L.P., a
Delaware limited partnership ("OCP"), USRR ACQUISITION CORP., an Indiana
corporation ("Borrower"), and BANK ONE, INDIANA, NATIONAL ASSOCIATION (the
"Bank").
Recitals
1. Concurrently with the execution of this Agreement the Bank
and Borrower are entering into a Credit Agreement, of even date (as the same may
hereafter be amended and/or restated from time to time and at any time, the
"Credit Agreement"), pursuant to which the Bank is to extend credit to Borrower,
subject to the fulfillment of certain conditions, including the execution and
delivery of this Agreement to the Bank by OCP and Borrower.
2. OCP, as of the date hereof, is the sole shareholder of
Borrower. OCP affirms Borrower as provided in the Credit Agreement. OCP further
affirms that: (i) OCP has by its execution of this Agreement that OCP desires
that the Bank enter into the Credit Agreement and extend the Revolving Loan,
Term Loan I, Term Loan II and Equipment Loan to determined that it is in the
best interests of Borrower and financially beneficial to Borrower for Borrower
to obtain credit from the Bank; (ii) OCP has received a copy of the Credit
Agreement and the other Loan Documents and is familiar with the terms of the
proposed credit extensions under and pursuant to the Credit Agreement; and (iii)
OCP hereby requests that the Bank extend the Loans to Borrower and any other
credit as from time to time Borrower may request from the Bank, and acknowledges
that this Agreement is executed to induce the Bank to execute the Credit
Agreement and to make the Loans and to extend such other credit as may be
extended from time to time under or pursuant to the Credit Agreement.
Agreement
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by each of the parties to this Agreement, it is agreed as follows:
1. Definitions. Terms used in this Agreement which are defined in the
Credit Agreement and which are not otherwise defined in this Agreement shall
have the same meanings in this Agreement as are ascribed to them in the Credit
Agreement. In addition, as used herein the following terms shall have the
following meanings:
(a) "Contribution Event" shall mean a failure of compliance with Section
5.0l(g)(2) of the Credit Agreement.
(b) "Contribution Maximum" shall have the meaning ascribed to such term in
paragraph 2 of this Agreement.
(c) "Required Cure Amount" shall mean that amount determined by the Bank
to be necessary to cure and remedy any Contribution Event which has
occurred. If a Contribution Event occurs which cannot be cured with
the payment of money or which will not be fully cured by the capital
contributions then available to be made pursuant to this Agreement,
the Required Cure Amount shall be the full remaining amount of the
Contribution Maximum or such lesser sum as the Bank may designate in
its Request.
(d) "Request" shall have the meaning ascribed to such term in paragraph 2
of this Agreement.
(e) "Term" shall mean the period beginning with the date of this Agreement
and ending on November 30, 2006.
2. CapitaI Contribution. OCP covenants and agrees that, from time to time
upon the occurrence during the Term of this Agreement of any Contribution Event
and the subsequent written request by the Bank to OCP specifying the Required
Cure Amount for such Contribution Event ("Request"), OCP will make a capital
contribution in cash to Borrower in such Required Cure Amount; provided that the
aggregate amount of all such capital contributions by OCP during the Term shall
not exceed the difference between (a) 25% of the aggregate Capital Commitments
(as such term is defined in OCP's Limited Partnership Agreement) of all Partners
of OCP, and (b) $880,000.00 (the "Contribution Maximum"). The foregoing capital
contribution covenant is for the independent benefit of the Bank and shall be
enforceable independently by the Bank without the participation or authorization
of Borrower. All capital contributions made by OCP pursuant to this Agreement
will be made in respect to the capital stock of Borrower owned by OCP and, if
Borrower declines to do so, without the issuance of any additional shares of
capital stock of Borrower. All capital contributions made by OCP pursuant to
this Agreement upon the issuance of a Request by the Bank shall be made within
ten (10) days after the date of delivery to OCP of the Request for such capital
contribution payment and shall be made by payment directly to the Bank for the
account of Borrower by OCP. Immediately upon such capital contribution payment
being received it shall be applied by Borrower to the Obligations in such order
as the Bank may determine (or, if there are no outstanding balances on the
Loans, held as cash collateral in an interest bearing account under the Security
Agreement). OCP or Borrower shall provide such confirmations as the Bank
reasonably may require of each capital contribution made pursuant to a Request
promptly after making each such capital contribution. In the event for any
reason this Agreement is deemed a subscription by OCP to make an additional
capital contribution to Borrower, Borrower hereby assigns such subscription to
the Bank as security for the Obligations and agrees that such subscription is a
general intangible subject to the security interests of the Bank granted under
the Security Agreement.
3. Enforcement. OCP agrees that its strict performance of this Agreement is
necessary, and substantial performance in good faith shall not be deemed
sufficient performance. OCP agrees that its strict performance of this Agreement
is of the essence of this undertaking and Agreement and a primary basis upon
which the Bank is executing the Credit Agreement. Therefore, OCP hereby waives
any and all defenses, whether legal or equitable, which it might raise against
the Bank with respect to strict enforcement of this Agreement and each of its
terms. OCP agrees to pay to the Bank all reasonable costs and reasonable
attorneys' fees incurred by the Bank in the enforcement of this Agreement after
any default hereunder by OCP.
4. Notices. Any Request or other notice to be given under this Agreement
shall be in writing and shall be delivered by any method permitted for notices
under the terms of the Credit Agreement and shall be addressed to the addresses
for the Bank and Borrower stated in the Credit Agreement and for OCP to the
address noted beneath its. signature at the foot of this Agreement.
5. Terms. (a) The obligations of OCP under this Agreement are absolute,
continuing and unconditional and shall not be released, abated, reduced,
terminated, discharged, waived or otherwise affected by any agreement or action
of Borrower or any other shareholder of Borrower or by any additional capital
contribution made to Borrower by OCP or any other Person other than those
capital contributions which are made pursuant to a Request. Notwithstanding
anything in this Agreement or any of the other Loan Documents to the contrary,
the Bank shall not be obligated to elect any other remedy before making a
Request and it shall not be obligated to make a Request before pursuing any
other right or remedy under any of the Loan Documents on or after the occurrence
of any Contribution Event. The Bank shall have the right, power and authority at
all times to exercise all of its rights and remedies at law or equity and under
the Loan Documents without first exercising any of its rights or remedies under
this Agreement. This Agreement shall remain in full force and effect until
expiration of the Term.
(b) The Bank may from time to time and without notice to or consent from
OCP, and without affecting in any way the obligations of OCP under this
Agreement: (i) obtain a security interest or Lien in any property of Borrower or
any other Person to secure all or any of the Obligations; (ii) obtain the
primary or secondary liability of any Person in addition to Borrower with
respect to all or any of the Obligations; (iii) release or compromise the
liability of any Person primarily or secondarily liable with respect to all or
any of the Obligations; (iv) release in whole or in part any security interest
or Lien that the Bank now or hereafter may have to secure all or any of the
Obligations; (v) increase the maximum amount of the Obligations which may be
incurred under the Credit Agreement from time to time and at any time; (vi)
amend or restate at any time and from time to time the Credit Agreement or any
of the other Loan Documents; or (vii) waive Events of Default under the Credit
Agreement or any of the other Loan Documents from time to time and at any time.
6. Modification. No modification, amendment, or alleged waiver of this
Agreement or any provision hereof will be binding upon the party sought to be
bound unless in writing and signed by such party or a duly authorized officer or
agent thereof.
7. Waiver/Forbearance. Notwithstanding any contrary provision in this
Agreement, in the event the Bank makes a Request for a capital contribution
under this Agreement and such capital contribution is timely made, then such
capital contribution for all purposes under the Credit Agreement and the other
Loan Documents shall be deemed to have been made on the date(s) of the
occurrence of the Contribution Event or Contribution Events which are the basis
for the Request. If a Request is made with respect to a Contribution Event which
may be remedied by the capital contribution identified in the Request, and no
other Event of Default has occurred and is continuing, the Bank shall forbear in
the exercise of its right to accelerate the maturity of the Obligations for the
ten (10) day period during which OCP is to make the capital contribution which
is the subject of the Request, thereby giving OCP the opportunity to remedy the
Event of Default or Unmatured Event of Default which is the Contribution Event
during such ten (10) day period. Such forbearance by the Bank shall not impair,
diminish or otherwise affect any right or remedy of the Bank, including the
Bank's right to refuse to make Advances while any Event of Default is
continuing, and shall not constitute or give rise to a defense by Borrower to
any of the Obligations.
8. Governing Law. This Agreement and the performance by the parties under
this Agreement shall be construed in accordance with and governed by the laws of
the State of Indiana.
IN WITNESS WHEREOF, this Agreement has been executed as of the 29th day of
December, 2000.
BANK ONE, INDIANA, NATIONAL
ASSOCIATION
By:_______________________________
Name: Brandt J. Burdick______________
Title: _Vice President_________________
OBSIDIAN CAPITAL PARTNERS, L.P.,
By: Obsidian Capital Company, LLC, its general
partner
By:________________________________
Name: Xxxxxxx X. Durham____________
Title: Managing Member____________
Address for notices to OCP:
Suite 3680 Bank One Tower
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
USRR ACQUISITION CORP.
By:_________________________________
Name:Xxxxxxxxxxx Caniff________________
Title: Secretary_______________________
EXHIBIT D
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT ("Agreement") is made as of the 29th day of
December, 2000 (the "Effective Date"), by SERVAAS, INC. ("Junior Creditor"),
USRR ACQUISITION CORP. (the "Company"), and BANK ONE, INDIANA, NATIONAL
ASSOCIATION ("Bank One").
Recitals
1. The Company and Bank One are parties to a Credit Agreement, of even date
(such credit agreement, as it may be amended, modified, restated, extended, or
renewed from time to time being referred to herein as the "Credit Agreement"),
pursuant to which Bank One has agreed to extend to the Company certain loans and
financial accommodations, subject to the fulfillment of certain conditions
including the execution and delivery of this Agreement by Junior Creditor and
the Company.
2. As a material inducement to Bank One to extend credit to the Company
pursuant to the Credit Agreement, Bank One, Junior Creditor and the Company have
agreed that the Subordinated Debt (as such term is defined herein) shall be
subordinated to the Obligations, all in accordance with the terms of this
Agreement.
Agreement
NOW THEREFORE, FOR VALUE RECEIVED, and in consideration of credit given,
being given and to be given, and of other financial accommodations afforded or
to be afforded by Bank One to the Company, Junior Creditor and the Company
hereby covenant to and agree with Bank One as follows:
1. Subordination. All of the Subordinated Debt (as such term is hereinafter
defined) is hereby MADE INFERIOR, SUBJECT AND SUBORDINATE in payment to the
prior final and indefeasible payment and satisfaction of all of the Obligations
(as such term is hereinafter defined), subject to the terms of this Agreement.
As used in this Agreement, the term "Obligations" shall mean all present
and future indebtedness, obligations and liabilities, and all renewals and
extensions thereof, now or hereafter owed by the Company to Bank One or its
successors and assigns, or any Refinancing Lender (as such term is hereinafter
defined), including without limitation all indebtedness, liabilities and
indebtedness arising under, in connection with, pursuant to or by virtue of the
Credit Agreement or any other of the "Loan Documents" (as such term is defined
in the Credit Agreement), or any Interest Rate Agreements between the Company
and Bank One, or any Refinancing Documents (as such term is hereinafter
defined), whether such indebtedness, obligations and liabilities are direct,
indirect, principal, interest, fees or other charges, reimbursement amounts,
indemnification amounts, fixed, contingent, liquidated, unliquidated, joint,
several, joint and several, and whether such indebtedness, liabilities and
obligations now exist or hereafter arise, and whether Bank One is now obligated
to extend such indebtedness, obligations and liabilities to the Company or
undertakes such obligation at any time after the Effective Date, as well as all
costs, expenses and attorneys' fees incurred by Senior Creditor (as such term is
hereinafter defined) in collecting the Obligations and enforcing rights or
remedies of Senior Creditor against the Company or against any collateral which
secures all or any part of the indebtedness, obligations and liabilities which
otherwise are a part of the Obligations.
As used in this Agreement, the term "Subordinated Debt" shall mean all of
the present and future indebtedness, obligations and liabilities, and all
renewals and extensions thereof, now or hereafter owed by the Company to the
Junior Creditor, or its successors and assigns, or to any other holder or
assignee of all or any of the Subordinated Notes or the Supply Agreement or any
rights therein (Junior Creditor and all other such assignees and holders, and
their respective successors and assigns, being referred to herein both
individually and collectively as "Subordinated Creditor"), howsoever evidenced
and whether or not evidenced by the Subordinated Note or the Supply Agreement,
and whether such indebtedness, obligations and liabilities are direct, indirect,
principal, interest, fees or other charges, reimbursement amounts,
indemnification amounts, fixed, contingent, liquidated, unliquidated, joint,
several, joint and several, and whether such indebtedness, liabilities and
obligations now exist or hereafter arise, and whether any Junior Creditor or any
other Subordinated Creditor is now obligated to extend such indebtedness,
obligations and liabilities to the Company or undertakes such obligation at any
time after the Effective Date, as well as all collection costs and attorneys'
fees incurred by Subordinated Creditor in collecting the Subordinated Debt and
enforcing rights or remedies against the Company or against any collateral which
secures all or any part of the Subordinated Debt.
As used in this Agreement, the term "Intercreditor Agreement" means that
certain Intercreditor Agreement, of even date, between Bank One and Junior
Creditor (the "Intercreditor Agreement").
As used in this Agreement, the term "Subordinated Note" means that certain
Subordinated Secured Promissory Note dated December 29, 2000, in the principal
sum of $1,750,000.00, executed by the Company to the order of Junior Creditor,
and all extensions, renewals, amendments, modifications and replacements
thereof.
As used in this Agreement, the term "Supply Agreement" means that certain
Supply and Consignment Agreement, dated December 29, 2000, between the Company
and Junior Creditor.
As used in this Agreement, the term "Refinancing Lender" means,
collectively, any Person or Persons to which Bank One or its successors and
assigns, at any time and from time to time hereafter assigns all or any part of
the Obligations (including without limiting the generality of the foregoing, any
Person which by amendment to the Credit Agreement becomes a lender under the
Credit Agreement) or which at any time and from time to time purchases or
refinances all or any of the Obligations and which is identified to Subordinated
Creditor by written notice from a Senior Creditor, which notice shall give the
name of such lender and its address and fax number for purposes of notices
hereunder, and shall identify the Refinancing Documents with respect to such
lender.
As used in this Agreement, the term "Refinancing Documents" means,
collectively, the loan agreements and notes and/or the leases which evidence the
Obligations outstanding to any Refinancing Lender or pursuant to which such
Obligations arise, as the same from time to time may be amended, renewed,
extended and/or restated.
As used in this Agreement, the term "Interest Rate Agreement" means any
interest rate hedging agreement, interest rate swap agreement, interest rate cap
agreement, or other interest rate protection agreement or arrangement designed
to protect the Company against fluctuations in interest rates.
As used in this Agreement, the term "Senior Creditor" means, collectively,
Bank One, the successors and assigns of Bank One, and each Refinancing Lender.
As used in this Agreement, the term "Person" means an individual, a
corporation, a limited or general partnership, a limited liability company, a
joint venture, a trust or unincorporated organization, a joint stock company or
other similar organization, or any other legal entity, and the term "Persons"
means more than one Person.
Until that date when all of the Obligations have been paid and satisfied in
full and no Obligations thereafter may arise under the Credit Agreement or any
outstanding Refinancing Documents (the "Termination Date"), unless a "Default"
or "Event of Default" (as each of such terms is defined in the Credit Agreement
or any Refinancing Document) has occurred and is continuing and a Senior
Creditor has given written notice thereof to Subordinated Creditor (a "Default
Notice"), the Company may pay to Subordinated Creditor and the Subordinated
Creditor may receive from the Company only the following payments of the
Subordinated Debt (collectively, the "Permitted Payments"): (a) scheduled
monthly payments of the purchase price of inventory purchased by the Company
under the Supply Agreement, provided that no such payment shall exceed
$41,667.00; (b) scheduled monthly payments of interest on the indebtedness
evidenced by the Subordinated Note which become, due and payable on or after
February 1, 2001, so long as the rate of interest for the interest actually paid
to Subordinated Creditor on account of such indebtedness does not exceed 14% at
any time prior to March 31, 2001, or 20% at any time thereafter; and (c) any
payments described in clauses (a) or (b) which become due and payable during any
period a Default Notice is in effect and which would have been Permitted
Payments but for the existence of the Default Notice, if and only if such
payments are paid after such Default Notice is withdrawn in writing by the
Senior Creditor giving such Default Notice and no other Default Notice is in
effect and not withdrawn at the time such payment is made, and such payment will
not cause a" Default" or an "Event of Default" (as such terms are defined in the
Credit Agreement or any Refinancing Document) to occur or exist.
Until the Termination Date and except as permitted by the terms of
paragraph 8 of this Agreement, Subordinated Creditor will not, without the prior
written consent of Senior Creditor:
a. Demand, seek or accept any payment or prepayment by the Company of
the Subordinated Debt, other than Permitted Payments;
b. Assign or subordinate in favor of any other Person, any part of the
Subordinated Debt or any right, claim or interest in or to the Subordinated
Debt, except to~ a Person who agrees unconditionally in a valid, binding
and enforceable writing in form and substance acceptable to Senior
Creditor, duly executed and delivered to Senior Creditor, to be bound by
this Subordination Agreement;
c. Commence or join with any other Person who claims to be a creditor
of the Company in commencing any bankruptcy, reorganization or insolvency
proceeding against the Company.
2. Receipt of Prohibited Payment. In the event any payment of Subordinated
Debt (whether principal or interest or other amount and including any payment of
interest or adequate protection or fees or costs made by the Company, as a
debtor-in-possession, or its trustee in any bankruptcy proceeding) which is not
a Permitted Payment is paid to or received by Subordinated Creditor (any such
payment being referred to herein as a "Prohibited Payment") prior to the
Termination Date, such Prohibited Payment shall be deemed to be held by the
recipient Subordinated Creditor as the property of and in trust for the benefit
of the Senior Creditor to whom Obligations are then outstanding and the
recipient Subordinated Creditor shall immediately deliver such Prohibited
Payment to Bank One or any other Senior Creditor designated by Bank One, in
precisely the form received (to the extent it is possible to deliver the
Prohibited Payment in that form), except for the Subordinated Creditor's
endorsement when necessary, for application against the Obligations in such
order as Senior Creditor may determine. The preceding sentence shall apply
regardless of whether such Prohibited Payment is made by the Company or any
other Person. In addition, so long as any portion of the Obligations is
outstanding or remains unsatisfied, none of the Subordinated Debt, directly or
indirectly, shall be reduced, paid or satisfied in whole or in part in any
manner by way of counterclaim, setoff, offset or charge back by Subordinated
Creditor.
3. Subordination of Liens. Except as provided in Section 4, and except as
otherwise provided in the Intercreditor Agreement, any and all right, title,
liens (including judgment liens), security interests, pledges, charges,
encumbrances, mortgages, deeds of trust or similar arrangement or interest
(collectively referred to herein as "Liens", and individually as a "Lien") which
Subordinated Creditor may acquire in any asset or property (whether tangible or
intangible and whether real or personal) of any Person to secure all or any part
of the Subordinated Debt, whether such asset or property is now owned or
hereafter acquired or now existing or hereafter created and wherever located,
are hereby unconditionally subordinated and made unconditionally subordinate and
junior in right of priority and rank to and subordinate to any and all security
interests, deeds of trust, mortgages and other Liens Bank One and any other
Senior Creditor have or may have now or at any time hereafter in the same
property. The priorities provided for in this Agreement shall apply:
(a) without regard to the time or order of attachment, perfection,
filing or recording of any Lien, or document granting, evidencing, giving
notice of or perfecting any Lien, to secure the obligations of the Company,
or the failure to give any notice of the existence, holding or acquisition
or expected acquisition of any such Lien;
(b) notwithstanding anything to the contrary in the provisions of the
United States Bankruptcy Code or the Uniform Commercial Code in any
relevant state of the United States or the laws of the State of Indiana or
any other relevant state, Which relate to the priority of security
interests, deeds of trust, mortgages and any other Lien;
(c) with respect to Subordinated Debt of the Company to Subordinated
Creditor, and of the Obligations of the Company to Senior Creditor,
whenever made, created or acquired; and
(d) notwithstanding the lapse of perfection of any Lien of Senior
Creditor or the failure of Senior Creditor to perfect any Lien.
Subordinated Creditor also agrees to execute any other documents or
financing statements reasonably required by Bank One or any other Senior
Creditor to effectuate, confirm or to give public notice of the terms and
provisions of this Agreement.
Notwithstanding the terms and provisions of this Section 3, and except as
otherwise provided in the Intercreditor Agreement, Junior Creditor acknowledges
that none of the Subordinated Debt may be secured by any Lien on any asset of
the Company except with the prior written consent of Bank One.
4. Covenants. Junior Creditor and the Company each hereby severally
covenant and warrant to Senior Creditor that, until the Termination Date:
(a) Subordinated Creditor shall not be granted or take or hold, by way
of direct grant from the Company or indirectly by way of assignment or
otherwise, any Lien or other right or interest in any asset or property of
the Company, whether now existing or hereafter arising, to secure all or
any part of the Subordinated Debt, and except that nothing in this
Agreement shall prohibit Subordinated Creditor from creating or perfecting
a judgment Lien against assets of the Company which arises from a judgment
obtained in a lawsuit permitted to be filed under this Agreement, but
payment and collection of each such judgment or in respect of all such
judgment Liens shall continue to be fully and unconditionally subordinated
to the Obligations as provided in this Agreement and the priority of all
such judgment Liens shall continue to be fully and unconditionally
subordinate and junior in right of priority and rank to and subordinated to
any and all Liens held or asserted by Bank One or any other Senior Creditor
as security for all or any part of the Obligations in or to any of the
property or assets subject to such judgment Liens.
(b) No promissory note, instrument or other evidence of indebtedness
has been or hereafter may be or will be issued by the Company to
Subordinated Creditor, directly or indirectly, in connection with or to
evidence any of the Subordinated Debt unless it shall contain in the body
thereof a conspicuous statement or notation (in form and substance
reasonably satisfactory to Senior Creditor) indicating that such instrument
and the Subordinated Debt evidenced by it are subordinated to all of the
Obligations and are subject to this Agreement.
(c) If the Company defaults on the Subordinated Debt or any portion
thereof or if Subordinated Creditor accelerates the maturity of any of the
Subordinated Debt, Subordinated Creditor shall give Bank One and any other
Senior Creditor which has by written notice identified itself to
Subordinated Creditor, written notice of the default or acceleration, as
applicable, which written notice shall be given within seven (7) calendar
days after Subordinated Creditor learns of each such default and within
three (3) calendar days of the date Subordinated Creditor accelerates the
maturity of any of the Subordinated Debt. However, except as permitted by
the Intercreditor Agreement, regardless of the Company's default on any of
the Subordinated Debt, Subordinated Creditor will not seek to foreclose,
exercise any remedies as a secured party under the Uniform Commercial Code
or other applicable law, or otherwise realize upon any Lien or other
security for all or any of the Subordinated Debt, and Subordinated Creditor
shall have no right to foreclose, exercise such remedies as a secured party
or otherwise realize on any such Lien or other security, until and unless
the Foreclosure Date (as defined hereinafter) shall have occurred. The
exercise of any power of attorney granted to Subordinated Creditor by the
Company under or in connection with any security agreement, mortgage, deed
of trust or other Lien document shall constitute the exercise of remedies
as a secured creditor and is therefor restricted as stated in the foregoing
sentence.
(d) No guaranty of payment or collection or grant of any Lien shall be
obtained or held at any time by Subordinated Creditor as security for all
or any part of the Subordinated Debt from any subsidiary or affiliate of
the Company, except for the pledge by Obsidian Capital Partners, L.P. of
the stock of the Company under and pursuant to that certain Stock Pledge
Agreement dated December 29, 2000, executed by Obsidian Capital Partners,
L.P. to secure the Subordinated Note.
(e) If at any time after a Default Notice is given and while such
Default Notice is outstanding and not withdrawn, the Company, with the
consent of Senior Creditor, elects to sell any of its assets or property
for a reasonably equivalent value and for cash, with the entire cash
proceeds of such sale (net only of reasonable costs and expenses incurred
by the Company to consummate such sale) to be paid to Senior Creditor to be
applied against outstanding Obligations and with a concurrent and
corresponding permanent reduction in the amount of the Senior Creditor's
lending commitment, then Subordinated Creditor shall provide a consent to
such sale and payment and shall release and terminate any Liens then held
by Subordinated Creditor in the asset or property being sold concurrently
with the closing of the sale (provided that any net cash proceeds from such
sale which are in excess of the outstanding Obligations shall be paid to
Subordinated Creditor for application against the Subordinated Debt).
5. Distributions. Upon any distribution of any of the assets of the
Company, whether by reason of sale, reorganization, liquidation, dissolution,
arrangement, bankruptcy, receivership, assignment for the benefit of creditors,
foreclosure or otherwise, Senior Creditor shall be entitled to receive payment
in full of all of the Obligations prior to the payment of all or any part of the
Subordinated Debt. In the event of any insolvency or bankruptcy proceedings
relative to the Company, Subordinated Creditor will not vote the Subordinated
Debt in favor of any plan unless the treatment of the Obligations under that
plan complies with 11 U.S.C. ss. 11 29(b)(2)(A)(i) and (ii). In the event
Subordinated Creditor shall receive any money, securities or other property
distributed on account of any liquidation, bankruptcy, receivership,
reorganization, assignment for the benefit of creditors or similar proceeding
with respect to the Company, Subordinated Creditor shall hold such money,
securities or other property in trust for the benefit of Bank One and any other
Senior Creditor to whom Obligations are then outstanding and shall deliver any
such property to Bank One, as representative of Senior Creditor, for application
to payment of the Obligations, in the same form as received, adding only such
endorsements or assignments as may be necessary to perfect the title of the
Senior Creditor to such property, for application to the Obligations. Any excess
of such property remaining after satisfaction of all of the Obligations shall be
returned to Subordinated Creditor. Senior Creditor may liquidate any noncash
property received from Subordinated Creditor pursuant to provisions of this
section in the manner in which collateral may be liquidated under the terms of
the Uniform Commercial Code as enacted in the State of Indiana, and such
property may be liquidated in any order that Senior Creditor shall determine in
the exercise of Senior Creditor's sole discretion. Nothing in this Section 5 or
otherwise in this Agreement shall prevent Junior Creditor from receiving
Permitted Junior Securities. As used herein, "Permitted Junior Securities"
means, with respect to a payment or distribution: (a) debt securities of the
Company or any successor corporation or legal entity provided for under a plan
of reorganization or the like that are subordinated to the Obligations then
outstanding at least to the same extent as the Subordinated Debt is subordinated
to the Obligations then outstanding; and (b) equity securities of the Company or
any successor corporation or legal entity provided for under a plan of
reorganization or the like, so long as the Company or such successor has no
obligation to repurchase or redeem all or any part of such equity securities
before the Obligations have been paid in full, and the Company and any such
successor corporation are prohibited from making or paying with respect to such
equity securities any dividend or other distribution which would not be
permitted by the terms of the Credit Agreement if made by the Company. To the
extent permitted by applicable law, subject to payment in full of all of the
Obligations, Subordinated Creditor shall be subrogated to the rights of Senior
Creditor to receive payments or distributions of assets of or ownership
interests in the Company made on the Obligations.
6. Subordination Absolute. The subordination of the Subordinated Debt to
the Obligations and the subordination of security interests and Liens pursuant
to Section 3 of this Agreement (the "Lien Subordination") shall be as provided
in this Agreement and Bank One and any other Senior Creditor from time to time
may, without the consent of or any notice to Subordinated Creditor, and without
affecting, waiving, diminishing, altering, terminating, releasing or impairing
in any respect or manner the unconditional subordination of the Subordinated
Debt to the Obligations or the Lien Subordination: (i) obtain a Lien in any
property or asset to secure all or any of the Obligations; (ii) obtain the
primary or secondary liability of any Person or Persons in addition to the
Company with respect to all or any of the Obligations; (iii) extend or renew
from time to time any of the Obligations for any period or periods beyond their
original due dates; (iv) release or compromise any liability of any other Person
or Persons primarily or secondarily liable with respect to all or any of the
Obligations; (v) release any security interest or other Lien that Senior
Creditor might now have or hereafter obtain in any property or assets securing
all or any of the Obligations and permit any substitution or exchange of any
such~ property or assets; (vi) waive (either entirely or for a stated period)
non-compliance by the Company with any of the terms, provisions and covenants of
the Credit Agreement, any of the Refinancing Documents, any Interest Rate
Agreements, or any of the other Loan Documents (as such term is defined in the
Credit Agreement); and (vii) amend, modify and/or restate at any time and from
time to time the Credit Agreement, any of the Refinancing Documents, any
Interest Rate Agreements, or any of the other Loan Documents (as such term is
defined in the Credit Agreement), including without limitation any such
amendment which may or will increase interest rates on all or any part of the
principal of the Obligations, increase or add other charges and fees to be paid
by the Company to Senior Creditor, or increase the aggregate amount of the
Obligations, so long as the aggregate principal amount of the Obligations may
not exceed at any time the sum of $9,500,000.00.
7. Avoided Payments. If at any time any payment or payments of any of the
Obligations to Senior Creditor are invalidated, declared to be fraudulent or
preferential, set aside, rescinded and/or required to be repaid by Senior
Creditor to a trustee, receiver or any other party under any bankruptcy act or
code, state or federal law, common law or equitable doctrine, then to the extent
of any sum not finally retained by Senior Creditor, Subordinated Creditor's
obligations to Senior Creditor under this Agreement shall be reinstated and this
Agreement shall remain in full force and effect (or be reinstated) until full
and final payment shall have been made to Senior Creditor. Subordinated Creditor
shall hold in trust for Senior Creditor and promptly remit to Senior Creditor
any payments received by Subordinated Creditor from the Company after such
invalidated, rescinded, avoided or returned payments, above described, were
originally made.
8. Standstill. Except as expressly provided in this Section 8 of this
Agreement, Subordinated Creditor will not xxx for or commence any legal action
or proceeding against the Company, or take any other action in exercise of any
remedy which it may have as a creditor to collect all or any part of the
Subordinated Debt, or to realize on any collateral for the Subordinated Debt,
including without limitation the commencement alone or with any other Person of
any bankruptcy, reorganization or insolvency proceeding against the Company or
Obsidian Capital Partner, L.P. (collectively, "Litigation Actions"). From and
after the later of that date which is two hundred forty (240) calendar days from
the date Subordinated Creditor receives a Default Notice from Senior Creditor
and that date which is one hundred twenty (120) calendar days from the date
Senior Creditor receives written notice from Subordinated Creditor stating that
Subordinated Creditor intends to commence one or more Litigation Actions
("Junior Creditor Notice"), Subordinated Creditor may commence any Litigation
Actions; provided, however, that no such Litigation Action may be commenced or
prosecuted to enforce or exercise any right or remedy of Subordinated Creditor
with respect to any Lien it may hold or assert as security for all or any part
of the Subordinated Debt until that date (the "Foreclosure Date") which is three
hundred and sixty five (365) calendar days after the date Senior Creditor
receives a Junior Creditor Notice which has not been withdrawn; and provided,
further, that each payment, collection or other recovery of Subordinated Debt
received or made by Subordinated Creditor after its receipt of a Default Notice
and until such Default Notice is withdrawn by the Senior Creditor issuing it
shall be deemed to be and for all purposes shall constitute a Prohibited Payment
subject to the requirements of paragraph 2 of this Agreement.
Nothing in this paragraph 8 shall prohibit Junior Creditor from taking
possession of, removing, and selling Specified Inventory (as defined in the
Intercreditor Agreement) to the extent and when such actions are permitted
under, and in accordance with the terms of, the Intercreditor Agreement.
9. Marshalling Waiver. Junior Creditor, on its own behalf and on behalf of
its successors and assigns and all others who are or become a Subordinated
Creditor, hereby expressly waives all rights, if any, to require a marshalling
of assets by Senior Creditor or to require that Senior Creditor first resort to
some or any portion of any collateral securing the Obligations to Senior
Creditor before foreclosing upon, selling or otherwise realizing on any portion
thereof.
10. Conflict with Credit Agreement/Subordinated Note- Required Consent. In
the event there is an express conflict between the terms and provisions of the
Credit Agreement or any Refinancing Document, and of this Agreement, the terms
and conditions of this Agreement shall govern and control.
11. Conflict with Supplv Agreement/l Intercreditor Agreement. In the event
there is an express conflict between the terms and provisions of the
Intercreditor Agreement and this Subordination Agreement, as they pertain to the
Specified Inventory (as defined in the Intercreditor Agreement), the terms and
conditions of the Intercreditor Agreement shall govern and control.
12. Enforcement and Benefit. Senior Creditor may require the Company and/or
Subordinated Creditor to furnish Senior Creditor with other or further evidence
of the subordinations provided herein when and as reasonably deemed necessary or
appropriate by Senior Creditor in the exercise of Senior Creditor's sole
discretion. In addition, the Company shall permit Senior Creditor to have access
from time to time during normal business hours to their respective books of
account with respect to the Subordinated Debt.
13. Modification. No modification, amendment, extension or alleged waiver
of this Agreement or any provision thereof will be binding upon the party sought
to be bound unless in writing and signed by such party or a duly authorized
officer or agent thereof.
14. Governing Law. This Agreement and the performance by the parties under
this Agreement shall be construed in accordance with the laws of the State of
Indiana, and any action or proceeding that may be brought, arising out of, in
connection with or related to this Agreement shall be governed by the laws of
the State of Indiana.
15. Captions. The captions used in this Agreement are for convenience and
identification purposes only, are not integral parts of this Agreement and are
not to be considered in the interpretation of this Agreement.
16. Notices. Any notice given under or with respect to this Agreement to
Bank One, the Company or Subordinated Creditor shall be in writing and, if
delivered by hand or sent by overnight courier service, shall be deemed to have
been given when delivered and, if mailed, shall be deemed to have been given
five (5) days after the date when sent by registered or certified mail, postage
prepaid, and addressed to. Bank One, the Company or Subordinated Creditor at its
address shown below, or at such other address as any such party may, by written
notice to the other party to this Agreement, have designated as its address for
such purpose. The addresses referred to above are as follows:
Company: Company: USRR Acquisition Corp.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: President
Bank One: Bank One, Indiana, National Association
000 Xxxxxxxx Xxxxxx, XX 1-0044
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
Subordinated Creditor: SerVaas, Inc.
Attn.: BeurtSerVaas
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, XX 00000
17. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the Company, Subordinated Creditor, Bank One, each
Refinancing Lender, and the respective successors and assigns of each of the
foregoing.
18. Counterparts. This Agreement may be executed, by original or facsimile
signatures, in two or more counterparts, each of which shall constitute an
original , but all of which when taken together shall constitute but one
agreement.
19. Waiver of Jury Trial: Jurisdiction. THE COMPANY, JUNIOR CREDITOR, AND
BANK ONE EACH HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY
WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER
BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG SENIOR CREDITOR,
SUBORDINATED CREDITOR AND/OR THE COMPANY, ARISING OUT OF OR IN ANY WAY RELATED
TO THIS AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO BANK ONE TO ENTER
INTO THE CREDIT AGREEMENT AND TO PROVIDE THE FINANCING DESCRIBED IN THE CREDIT
AGREEMENT. NONE OF THE PARTIES TO THIS AGREEMENT WILL SEEK TO CONSOLIDATE ANY
SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH
A JURY TRIAL HAS NOT BEEN OR CANNOT BE WAIVED. JUNIOR CREDITOR AGREES THAT THE
COURTS OF THE STATE OF INDIANA LOCATED IN INDIANAPOLIS, INDIANA, HAVE EXCLUSIVE
JURISDICTION OVER ANY AND ALL ACTIONS AND PROCEEDINGS INVOLVING THIS AGREEMENT
OR ANY OTHER AGREEMENT MADE IN CONNECTION HEREWITH AND JUNIOR CREDITOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREES TO SUBMIT TO THE JURISDICTION OF SUCH
COURTS FOR PURPOSES OF ANY SUCH ACTION OR PROCEEDING. JUNIOR CREDITOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION THAT JUNIOR CREDITOR MAY
NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING, INCLUDING
ANY CLAIM THAT SUCH COURT IS AN INCONVENIENT FORUM, AND CONSENTS TO SERVICE OF
PROCESS PROVIDED THE SAME IS IN ACCORDANCE WITH THE TERMS HEREOF. FINAL JUDGMENT
IN ANY SUCH PROCEEDING AFTER ALL APPEALS HAVE BEEN EXHAUSTED OR WAIVED SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT.
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement by their respective duly authorized signatories as of the date and
year first set forth above.
SERVAAS, INC.
By:_____________________________________
Name:___________________________________
Title: ____________________________________
"Junior Creditor"
USRR ACQUISITION CORP.
By:______________________________________
Name:________Christopher Caniff____________
Title: ________Secretary___________________
"Company"
BANK ONE, INDIANA, NATIONAL ASSOCIATION
By:______________________________________
Name: _________Brandt J. Burdick__________
Title:__________Vice President______________
"Bank One"
STATE OF INDIANA )
) ss:
COUNTY OF_____________)
Before me, a Notary Public in and for said County and State, personally
appeared _________________________________________who, having been first duly
sworn, acknowledged the execution of the foregoing Subordination Agreement for
and on behalf of the Junior Creditor.
Witness my hand and Notarial Seal this 29th day of December, 2000.
------------------------------------
Printed Name:________________________
I am a resident of___________ County My commission expires:
EXHIBIT E
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT ("Agreement") is executed as of this 29th
day of December, 2000, by BANK ONE, INDIANA, NATIONAL ASSOCIATION (the "Bank")
and SERVAAS, INC. ("Creditor").
Recitals
1. Under and pursuant to that certain Credit Agreement dated as of
December 29, 2000, between USRR Acquisition Corp. ("Borrower") and the Bank
(such credit agreement, as has been and as it may be amended, modified,
restated, extended, or renewed from time to time being referred to herein as the
"Credit Agreement"), Borrower has granted to the Bank security interests and
liens in all Borrower's real and personal property, now owned and existing or
hereafter acquired and arising (the "Bank Collateral"), which includes, without
limitation, all Borrower's inventory of road worn domestic and foreign scrap
inner tubes and factory reject tubes ("Scrap Butyl"), as security for (i) all of
the indebtedness, obligations and liabilities of Borrower to the Bank, whenever
arising, under or pursuant to the Credit Agreement or any of the Bank Documents
(including, but not limited to, any interest accruing after the occurrence of a
filing of a petition of bankruptcy under the Bankruptcy Code with respect to
Borrower or any of its subsidiaries, regardless of whether such interest is an
allowed claim under the Bankruptcy Code), and all renewals and extensions
thereof, (ii) all liabilities and obligations, whenever arising, owing from the
Borrower or any of its subsidiaries to the Bank, or any affiliate of the Bank,
arising under any agreement entered into to protect against fluctuations in
interest rates, or currency or raw materials values, and (iii) all costs,
expenses and attorneys fees incurred by the Bank in the enforcement or
collection thereof (collectively, the "Bank Obligations"). All of the documents,
instruments, and agreements by, between or among the Bank and Borrower
evidencing all or any part of the Bank Obligations, creating in favor of the
Bank security interests or liens in all or any part of the Bank Collateral, or
otherwise executed in connection with or related to any of the foregoing, as
amended, modified, and/or restated from time to time, are referred to
collectively as the "Bank Documents".
2. Borrower has entered into a Supply and Consignment Agreement in the
form attached to this Agreement as Exhibit B (the "Supply Agreement") with
Creditor pursuant to which Creditor will sell to Borrower on consignment
6,400,000 pounds of Scrap Butyl owned by Creditor (collectively, the "Specified
Inventory") in monthly orders of not less than 266,667 pounds each. All
obligations, liabilities and responsibilities of Borrower to Creditor under the
Supply Agreement are referred to herein collectively as the "Creditor
Obligations".
3. The Specified Inventory is now and will continue to be located on
the premises of Borrower at 0000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx, and
will be commingled with and indistinguishable from other Scrap Butyl on the
premises of Borrower. Therefore, the Bank and the Creditor are entering into
this Agreement to establish their agreement and understanding with respect to
their respective interests in Scrap Butyl Inventory (as defined below), and
other matters set forth herein.
Agreement
NOW THEREFORE, in consideration of the foregoing, and the mutual
covenants and agreements of the parties herein, the Bank and Creditor agree as
follows:
1. Priorities. Notwithstanding the date, manner, or order of perfection
of the ownership or security interests of Creditor and the Bank in Borrower's
right, title and interest in Scrap Butyl owned by or consigned to Borrower and
proceeds thereof (the "Scrap Butyl Inventory"), and notwithstanding any
provisions of the Uniform Commercial Code (as in effect in any jurisdiction), or
any applicable law or decision, or any provision of the Bank Documents or the
Supply Agreement, or whether the Bank or Creditor, or any of their respective
agents, has possession of the Scrap Butyl, as between the Bank and Creditor:
(a) Creditor shall be deemed to be the owner of, and shall have a first
and prior interest (or, in the event the Supply Agreement is deemed to create a
security interest in favor of Creditor in the Specified Inventory securing the
Creditor Obligations, a first and prior security interest) in (I) a portion of
the Specified Inventory not exceeding at any time the lesser of(A) the balance
of the "SerVaas Scrap Butyl" (as defined in the Supply Agreement), not yet used
in Borrower's production, as determined by reference to the books and records of
Borrower, or (B) the balance of the "SerVaas Scrap Butyl" not yet used in
Borrower's production, as certified by Borrower to Creditor in the report of
sales or Certification of Consigned Goods Status most recently delivered by
Borrower to Creditor pursuant to the Supply Agreement and to the Bank, reduced
by 266,667 pounds for each period of 30 days that has elapsed since the last day
of the period covered by such report of sales and Certification of Consigned
Goods Status and (ii) proceeds of insurance payable by reason of loss or damage
to such portion of the Specified Inventory (but no other proceeds of Specified
Inventory) (collectively, the "Specified Collateral").
(b) The Bank shall have a lien and security interest in all Scrap Butyl
Inventory as security for the Bank Obligations, which lien and security interest
(i) as it pertains to the Specified Collateral, shall be JUNIOR, INFERIOR and
SUBORDINATE only to the interest of Creditor in the Specified Collateral
described in (a) above, and (ii) shall otherwise be SENIOR and SUPERIOR to any
liens, security interests or other interests now or hereafter held by Creditor
in the Scrap Butyl Inventory as security for the Creditor Obligations or
otherwise.
The priorities of the liens and security interests established,
altered, or specified in this paragraph 1 are applicable, irrespective of the
time or order of creation, attachment or perfection thereof, the method of
perfection, the time or order of filing of financing statements or taking of
possession, or the giving of or failure to give notice of the acquisition or
expected acquisition of purchase money or other security interests; provided,
however, that the subordinations and relative priorities set forth in this
paragraph 1 are expressly conditioned upon the due and proper perfection, and
the nonvoidability by a bankruptcy trustee, of any liens, security interests or
other interests which have priority pursuant hereto, and provided further,
however, that if any lien, security interest or other interest to which any
other lien, security interest or other interest is subordinated pursuant hereto
is not perfected, or is avoidable by a bankruptcy trustee for any reason, then
the subordination specified herein with respect thereto shall, to the extent not
perfected or avoidable, as the case may be, not be effective.
2. Warranties. Representations and Agreements of Creditor. Creditor
warrants and represents to and agrees with the Bank as follows:
(a) Creditor does not hold, will not assert and hereby waives any
security interests or liens in any of the assets of Borrower, other than the
Specified Collateral, and any such security interests or liens previously held
by Creditor have been terminated and released;
(b) Notwithstanding anything to the contrary set forth in the Supply
Agreement or any other agreement between Borrower and Creditor: (1) no present
or future obligations, liabilities or indebtedness of Borrower to Creditor,
other than the Creditor Obligations, are or shall be secured by the Specified
Collateral, and to the extent the Supply Agreement creates or might be deemed to
create a lien or security interest in the Specified Collateral to secure any
such obligations, liabilities, or indebtedness, Creditor hereby waives and
relinquishes and agrees not to assert such lien or security interest; and (ii)
Creditor does not claim, hereby waives and relinquishes, and agrees not to
assert any lien, security interest, or other interest in accounts, chattel
paper, or general intangibles of Borrower, including without limitation
accounts, chattel paper, and general intangibles that constitute proceeds of
Specified Inventory, and agrees that Borrower's accounts, chattel paper, and
general intangibles shall not in any event constitute part of the "Specified
Collateral", provided, however, that nothing contained in this Agreement shall
be construed to impair or waive any rights Creditor has pursuant to the Stock
Pledge Agreement given by Obsidian Capital Partners, L.P. as security for that
certain Subordinated Promissory Note of this date between Creditor and Borrower,
which Subordinated Promissory Note is subject to that certain Subordination
Agreement, of even date, among the Bank, Creditor, and Borrower (the
"Subordination Agreement"); and
(c) As of the date of this Agreement, Borrower is not in default with
respect to any of the Creditor Obligations.
3. Bank Collateral/Subordination by Creditor. Creditor covenants and
agrees that until all of the Bank Obligations are fully paid and satisfied,
Creditor shall not accept or acquire any security interests or liens in any of
the Bank Collateral, other than the Specified Collateral. Creditor further
agrees that in the event Creditor now holds or hereafter acquires any security
interests or liens in or on any of the Bank Collateral, other than the Specified
Collateral, in violation of the foregoing covenant, the purported security
interests and liens of Creditor in all events shall be subject to the
Subordination Agreement.
Notwithstanding anything to the contrary in the Subordination Agreement, in the
event Borrower fails to make payment when due for any monthly purchase of
SerVaas Scrap Butyl as provided in the Supply Agreement, such failure continues
uncured for a period of thirty (30) days, and Creditor has given to the Bank not
fewer than fifteen (15) days' prior written notice of its intent to exercise the
remedies permitted under this paragraph 3, then Creditor shall be entitled to
take possession of. remove, and sell the Specified Inventory in a commercially
reasonable manner, and to apply the proceeds of such sale to the Creditor
Obligations. Any Creditor Obligations that remain unpaid after application of
such sale proceeds shall constitute Subordinated Debt subject in all respects to
the Subordination Agreement. Any proceeds of such sale in excess of the Creditor
Obligations shall be deemed a Prohibited Payment under the Subordination
Agreement, and shall be immediately remitted to the Bank pursuant to Section 2
of the Subordination Agreement. In the event that Creditor exercises its rights
under this paragraph 3, the Bank agrees and hereby consents (to the extent that
such agreement or consent is or should become necessary) that the Specified
Inventory may remain at Borrower's premises, free of charge, for a commercially
reasonable time provided that Creditor is diligent in making arrangements for
its sale or use in Borrower's operations. In the event that Bank accelerates
Borrower's obligations under the Credit Agreement, and elects to realize upon
its security interest in Scrap Butyl Inventory, Bank and Creditor will use
reasonable efforts to cooperate in the liquidation of the Scrap Butyl Inventory.
4. Waiver of Marshal1ing. Creditor hereby waives any right to marshalling
of the assets of Borrower.
5. Effect of Agreement. This Agreement: (i) is solely for the purpose and
shall have the sole effect of defining the relative rights of Creditor and the
Bank; (ii) may not be relied upon or enforced by Borrower or by any other
person; and (iii) shall not impair or affect in any way any of the Creditor
Obligations or the Bank Obligations, which are absolute and unconditional.
6. Notices. Any and all notices or other communications required or
permitted under this Agreement shall be in writing and shall be sufficiently
given if delivered in person to, or sent by certified or registered mail,
postage prepaid, addressed as follows:
To Creditor: SerVaas, Inc.
Attn.: Beurt SerVaas
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, XX 00000
To the Bank: Bank One, Indiana, National Association
Bank Xxx Xxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, Vice President
or to such other address or person as shall be designated from time to time by
notice.
7. Binding on Successors and Assigns. All the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto, their respective successors, assigns and legal representatives. Without
limiting the generality of the foregoing, all the terms and provisions of this
Agreement shall be binding upon any purchaser, transferee, assignee or successor
of or to the Bank Obligations and the Creditor Obligations, respectively.
Whenever in this Agreement reference to any of the parties hereto is made, such
reference shall be deemed to include the successors and assigns of such party.
8. Further Assurances. Each of the parties hereto covenants and agrees
to execute and deliver, or cause to be executed and delivered, upon request of
any other party such additional documents or agreements, and to perform or cause
to be performed such additional acts as may be necessary or proper in the
reasonable opinion of such other party to carry out the provisions, intent and
purposes of this Agreement.
9. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana. The words "accounts", "chattel
paper", "general intangibles" and proceeds" are used herein with the meaning
ascribed thereto in Article 9 of the Uniform Commercial Code as adopted and in
effect in Indiana on the date hereof. If any provision of this Agreement is held
invalid, that shall not affect the validity of any other provision of this
Agreement.
10. Waiver of Jury Trial; Jurisdiction. CREDITOR AND BANK EACH HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE A (WHETHER BASED UPON CONTRACT, TORT
OR OTHERWISE) BETWEEN CREDITOR, AND BANK, ARISING OUT OF OR IN ANY WAY RELATED
TO THIS AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO BANK TO ENTER INTO
THE CREDIT AGREEMENT AND TO PROVIDE THE FINANCING DESCRIBED IN THE CREDIT
AGREEMENT. NONE OF THE PARTIES TO THIS AGREEMENT WILL SEEK TO CONSOLIDATE ANY
SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH
A JURY TRIAL HAS NOT BEEN OR CANNOT BE WAIVED. CREDITOR AGREES THAT THE COURTS
OF THE STATE OF INDIANA LOCATED IN INDIANAPOLIS, INDIANA, HAVE EXCLUSIVE
JURISDICTION OVER ANY AND ALL ACTIONS AND PROCEEDINGS INVOLVING THIS AGREEMENT
OR ANY OTHER AGREEMENT MADE IN CONNECTION HEREWITH AND CREDITOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREES TO SUBMIT TO THE JURISDICTION OF SUCH
COURTS FOR PURPOSES OF ANY SUCH ACTION OR PROCEEDING. CREDITOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION THAT CREDITOR MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING, INCLUDING ANY
CLAIM THAT SUCH COURT IS AN INCONVENIENT FORUM, AND CONSENTS TO SERVICE OF
PROCESS PROVIDED THE SAME IS IN ACCORDANCE WITH THE TERMS HEREOF. FINAL JUDGMENT
IN ANY SUCH PROCEEDING AFTER ALL APPEALS HAVE BEEN EXHAUSTED OR WAIVED SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT.
IN WITNESS WHEREOF, Creditor and the Bank, by their duly authorized
representatives and officers, have executed this Intercreditor Agreement as of
the date written above.
BANK ONE, INDIANA, NATIONAL ASSOCIATION
By:_____________________________
Printed:_____Brandt J. Burdick_____
Title: Vice President
SERVAAS, INC.
By:
Printed: Xxxxxxxxxxx Xxxxxx
Title: Secretary
CONSENT
USRR Acquisition Corp. hereby unconditionally consents to the execution of
the above Intercreditor Agreement, and to the agreements and performances of the
parties thereto in the Intercreditor Agreement.
Date: December 29, 2000
USRR ACQUISITION CORP.
By:
Printed: Xxxxxxxxxxx Xxxxxx
Title: Secretary
EXHIBIT F
OFFICER'S CERTIFICATE
I certify and represent to Bank One, Indiana, National Association (the "Bank"),
that I am the ____________________ of USRR ACQUISITION CORP., an Indiana
corporation (the "Company").
In accordance with the Credit Agreement dated as of December ____ 2000, between
the Company and the Bank (as the same has been amended, modified, supplemented
and/or restated from time to time and at any time, the "Credit Agreement"), I
certify to you that:
1. Each of the representations contained in Section 3.01 of the Credit
Agreement (other than the representation contained in Section 3.0 1(d) of
the Credit Agreement) are true and correct as of this date, except that all
such representations are construed to have been amended to conform with any
changes of which the Company shall have previously given the Bank notice in
writing.
2. The financial statements of the Company as of___________________ 20 __ ,
and for the fiscal year then ended, and the financial statements as
of______________________, 20, and for the period then ended, were prepared
in accordance with GAAP and present fairly the financial condition of the
Company and the results of its operations as of the dates of such
statements and for the fiscal periods then ended, and since the date of the
latest of such statements there has been no material adverse change in its
financial position or its operations.
3. No Event of Default or Unmatured Event of Default has occurred and is
continuing.
4. The attached calculations demonstrate that as of the last day of the fiscal
quarter ending _________________ 20____, the Company was in compliance with
the covenants in Section 5.01(g) of the Credit Agreement
All capitalized terms which are defined in the Credit Agreement shall have when
used herein the same meanings as are ascribed to them in the Credit Agreement.
Date: _____________ , 2000 Signed:
Printed Name:_____________________
the ___________________________ of
USRR Acquisition Corp.
REVOLVING NOTE
$3,000,000.00 Dated: December 29, 2000
Due: November 30, 2001
FOR VALUE RECEIVED, on or before November 30, 2001, USRR
ACQUISITION CORP., an Indiana corporation ("Company"), unconditionally promises
to pay to the order of BANK ONE, INDIANA, NATIONAL ASSOCIATION (the "Bank"), at
Bank One Center/Tower, Suite 1911, 000 Xxxxxxxx Xxxxxx, X.X. Xxx 0000,
Xxxxxxxxxxxx, Xxxxxxx 00000-0000, the principal sum of Three Million Dollars
($3,000,000.00), or so much of such amount as may be disbursed by the Bank as
Advances made on the Revolving Loan under the terms of the Credit Agreement
dated as of even date, by and between Company and the Bank (referred to herein,
as the same may hereafter be modified, amended, restated, and/or extended from
time to time and at any time, as the "Credit Agreement"), with interest thereon
at the rates provided in the Credit Agreement. Capitalized terms used herein but
not defined herein shall have the meanings ascribed thereto in the Credit
Agreement.
The principal of this Revolving Note and all interest accruing
thereon shall be due and payable by Company on such dates and in such amounts as
provided in, and in accordance with the terms of, the Credit Agreement. All
amounts received on this Revolving Note shall be applied in accordance with the
terms of the Credit Agreement.
This Revolving Note is the "Revolving Note" referred to in the
Credit Agreement, to which reference is made for the conditions and procedures
under which Advances, payments, readvances and repayments may be made prior to
the maturity of this Revolving Note, for the terms upon which Company may make
prepayments from time to time and at any time prior to the maturity of this
Revolving Note and the terms of any prepayment premiums, penalties and other
charges which may be due and payable in connection therewith, and for the terms
and conditions upon which the maturity of this Revolving Note may be accelerated
and the unpaid balance of principal and accrued interest thereon declared
immediately due and payable.
If any installment of interest due under the terms of this
Revolving Note falls due on a day which is not a Banking Day, the due date shall
be extended to the next succeeding Banking Day and interest will be payable at
the applicable rate for the period of such extension.
If any installment of principal or interest due under the
terms of this Revolving Note prior to maturity is not paid in full on or before
the date which is ten (10) days after the date when due, then the Bank at its
option and without prior notice to the Company, may assess a late payment fee in
an amount equal to the greater of $25.00 or five percent (5%) of the amount past
due up to the maximum of $1,500.00 per late charge. Each late payment fee
assessed shall be due and payable on the earlier of the next regularly scheduled
interest payment date or the maturity of this Revolving Note. Waiver by the Bank
of any late payment fee assessed, or the failure of the Bank in any instance to
assess a late payment fee shall not be construed as a waiver by the Bank of its
right to assess late payment fees thereafter.
All amounts payable under this Revolving Note shall be payable
without relief from valuation and appraisement laws, and with all collection
costs and attorneys' fees.
The holder of this Revolving Note, at its option, may make
extensions of time for payment of the indebtedness evidenced by this Revolving
Note, or approve reductions of the payments thereon, release of any collateral
securing payment of such indebtedness or accept a renewal Revolving Note or
Revolving Notes therefor, all without notice to Company or any endorser(s), and
Company and all endorsers hereby severally consent to any such extensions,
reductions, releases and renewals, all without notice, and agree that any such
action shall not release or discharge any of them from any liability hereunder.
Company and endorser(s), jointly and severally, waive demand, presentment for
payment, protest, notice of protest and notice of nonpayment or dishonor of this
Revolving Note and each of them consents to all extensions of the time of
payment thereof.
The principal amount of this Revolving Note outstanding from
time to time shall be determined by reference to the books and records of the
Bank on which shall be recorded each Advance under the Revolving Loan evidenced
by this Revolving Note, and all payments by Company on account of such Revolving
Loan. Such books and records shall be deemed prima facie to be correct on such
matters.
This Revolving Note is made under and will be governed in all
cases by the substantive laws of the State of Indiana, notwithstanding the fact
that Indiana conflicts of laws rules might otherwise require the substantive
rules of law of another jurisdiction to apply.
USRR ACQUISITION CORP.,
an Indiana corporation
By:______________________________________
Name: Xxxxxxxxxxx Xxxxxx
Title: Secretary
TERM NOTE I
$2,500,000.00 Dated: December 29, 2000
Due: November 30, 2005
FOR VALUE RECEIVED, on or before November 30, 2005, USRR
ACQUISITION CORP., an Indiana corporation ("Company"), unconditionally promises
to pay to the order of BANK ONE, INDIANA, NATIONAL ASSOCIATION, a national
banking association (the "Bank"), at Bank One Center/Tower, Suite 1911, 000
Xxxxxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxxxxxxxx, Xxxxxxx 00000-0000, the principal
sum of Two Million Five Hundred Thousand Dollars ($2,500,000.00), with interest
thereon at the rates provided in and in accordance with the terms of the Credit
Agreement, dated as of even date, by and between Company and the Bank (referred
to herein, as the same may hereafter be modified, amended, restated, and/or
extended from time to time and at any time, as the "Credit Agreement").
Capitalized terms used herein but not defined herein shall have the meanings
ascribed thereto in the Credit Agreement.
The principal of this Term Note I and all interest accruing
thereon shall be due and payable by Company on such dates and in such amounts as
provided in, and in accordance with the terms of, the Credit Agreement. All
amounts received on this Term Note I shall be applied in accordance with the
terms of the Credit Agreement.
This Term Note I is the "Term Note I" referred to in the
Credit Agreement, to which reference is made for the terms upon which Company
may make prepayments from time to time and at any time prior to the maturity of
this Term Note I and the terms of any prepayment premiums or penalties which may
be due and payable in connection therewith, and for the terms and conditions
upon which the maturity of this Term Note I may be accelerated and the unpaid
balance of principal and accrued interest thereon declared immediately due and
payable.
If any installment of principal or interest due under the
terms of this Term Note I falls due on a day which is not a Banking Day, the due
date shall be extended to the next succeeding Banking Day and interest will be
payable at the applicable rate for the period of such extension.
If any installment of principal or interest due under the
terms of this Term Note I prior to maturity is not paid in full when due, then
the Bank at its option and without prior notice to the Company, may assess a
late payment fee in an amount equal to the greater of $25.00 or Five Percent
(5%) of the amount past due up to the maximum of $1,500.00 per late charge. Each
late payment fee assessed shall be due and payable on the earlier of the next
regularly scheduled principal or interest payment date or the maturity of this
Term Note I. Waiver by the Bank of any late payment fee assessed, or the failure
of the Bank in any instance to assess a late payment fee shall not be construed
as a waiver by the Bank of its right to assess late payment fees thereafter.
All amounts payable under this Term Note I shall be payable
without relief from valuation and appraisement laws, and with all collection
costs and attorneys' fees.
The holder of this Term Note I, at its option, may make
extensions of time for payment of the indebtedness evidenced by this Term Note
I, or reduce the payments thereon, release any collateral securing payment of
such indebtedness or accept a renewal note or notes therefor, all without notice
to Company or any endorser(s), and Company and all endorsers hereby severally
consent to any such extensions, reductions, releases and renewals, all without
notice, and agree that any such action shall not release or discharge any of
them from any liability hereunder. Company and endorser(s), jointly and
severally, waive demand, presentment for payment, protest, notice of protest and
notice of nonpayment or dishonor of this Term Note I and each of them consents
to all extensions of the time of payment thereof.
This Term Note I is made under and will be governed in all
cases by the substantive laws of the State of Indiana, notwithstanding the fact
that Indiana conflicts of laws rules might otherwise require the substantive
rules of law of another jurisdiction to apply.
USRR ACQUISITION CORP.,
an Indiana corporation
By:________________________________
Name: Xxxxxxxxxxx Xxxxxx
Title: Secretary
EQUIPMENT NOTE
$200,000.00 Dated: December 29, 2000
Due: November 30, 2006
FOR VALUE RECEIVED, on or before November 30, 2006, USRR
ACQUISITION CORP., an Indiana corporation ("Company"), unconditionally promises
to pay to the order of BANK ONE, INDIANA, NATIONAL ASSOCIATION (the "Bank"), at
Bank One Center/Tower, Suite 1911, 000 Xxxxxxxx Xxxxxx, X.X. Xxx 0000,
Xxxxxxxxxxxx, Xxxxxxx 00000-0000, the principal sum of Two Hundred Thousand
Dollars ($200,000.00), or so much of such amount as may be disbursed by the Bank
as Advances made on the Equipment Loan under the terms of the Credit Agreement
dated as of even date, by and between Company and the Bank (referred to herein,
as the same may hereafter be modified, amended, restated, and/or extended from
time to time and at any time, as the "Credit Agreement"), with interest thereon
at the rates provided in the Credit Agreement. Capitalized terms used herein but
not defined herein shall have the meanings ascribed thereto in the Credit
Agreement.
The principal of this Equipment Note and all interest accruing
thereon shall be due and payable by Company on such dates and in such amounts as
provided in, and in accordance with the terms of, the Credit Agreement. All
amounts received on this Equipment Note shall be applied in accordance with the
terms of the Credit Agreement.
This Equipment Note is the "Equipment Note" referred to in the
Credit Agreement, to which reference is made for the conditions and procedures
under which Advances may be made, for the terms upon which Company may make
prepayments from time to time and at any time prior to the maturity of this
Equipment Note and the terms of any prepayment premiums or penalties which may
be due and payable in connection therewith, and for the terms and conditions
upon which the maturity of this Equipment Note may be accelerated and the unpaid
balance of principal and accrued interest thereon declared immediately due and
payable.
If any installment of principal or interest due under the
terms of this Equipment Note falls due on a day which is not a Banking Day, the
due date shall be extended to the next succeeding Banking Day and interest will
be payable at the applicable rate for the period of such extension.
If any installment of principal or interest due under the
terms of this Equipment Note prior to maturity is not paid in full when due,
then the Bank at its option and without prior notice to the Company, may assess
a late payment fee in an amount equal to the greater of $25.00 or Five Percent
(5%) of the amount past due up to the maximum of $1,500.00 per late charge. Each
late payment fee assessed shall be due and payable on the earlier of the next
regularly scheduled principal or interest payment date or the maturity of this
Equipment Note. Waiver by the Bank of any late payment fee assessed, or the
failure of the Bank in any instance to assess a late payment fee shall not be
construed as a waiver by the Bank of its right to assess late payment fees
thereafter.
All amounts payable under this Equipment Note shall be payable
without relief from valuation and appraisement laws, and with all collection
costs and attorneys' fees.
The holder of this Equipment Note, at its option, may make
extensions of time for payment of the indebtedness evidenced by this Equipment
Note, or reduce the payments thereon, release any collateral securing payment of
such indebtedness or accept a renewal note or notes therefor, all without notice
to Company or any endorser(s), and Company and all endorsers hereby severally
consent to any such extensions, reductions, releases and renewals, all without
notice, and agree that any such action shall not release or discharge any of
them from any liability hereunder. Company and endorser(s), jointly and
severally, waive demand, presentment for payment, protest, notice of protest and
notice of nonpayment or dishonor of this Equipment Note and each of them
consents to all extensions of the time of payment thereof.
The principal amount of the Equipment Note outstanding from
time to time shall be determined by reference to the books and records of the
Bank on which shall be recorded each Advance under the Equipment Loan evidenced
by this Equipment Note, and all payments on account of such Equipment Loan. Such
books and records shall be deemed prima facie to be correct on such matters.
This Equipment Note is made under and will be governed in all
cases by the substantive laws of the State of Indiana, notwithstanding the fact
that Indiana conflicts of laws rules might otherwise require the substantive
rules of law of another jurisdiction to apply.
USRR ACQUISITION CORP.,
an Indiana corporation
By:______________________________
Name: Xxxxxxxxxxx Xxxxxx
Title: Secretary
TERM NOTE II
$500,000.00 Dated: December 29, 2000
Due: November 30, 2005
FOR VALUE RECEIVED, on or before November 30, 2005, USRR
ACQUISITION CORP., an Indiana corporation ("Company"), unconditionally promises
to pay to the order of BANK ONE, INDIANA, NATIONAL ASSOCIATION, a national
banking association (the "Bank"), at Bank One Center/Tower, Suite 1911, 000
Xxxxxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxxxxxxxx, Xxxxxxx 00000-0000, the principal
sum of Five Hundred Thousand Dollars ($500,000.00), with interest thereon at the
rates provided in and in accordance with the terms of the Credit Agreement,
dated as of even date, by and between Company and the Bank (referred to herein,
as the same may hereafter be modified, amended, restated, and/or extended from
time to time and at any time, as the "Credit Agreement"). Capitalized terms used
herein but not defined herein shall have the meanings ascribed thereto in the
Credit Agreement.
The principal of this Term Note II and all interest accruing
thereon shall be due and payable by Company on such dates and in such amounts as
provided in, and in accordance with the terms of, the Credit Agreement. All
amounts received on this Term Note II shall be applied in accordance with the
terms of the Credit Agreement.
This Term Note II is the "Term Note II" referred to in the
Credit Agreement, to which reference is made for the terms upon which Company
may make prepayments from time to time and at any time prior to the maturity of
this Term Note II and the terms of any prepayment premiums or penalties which
may be due and payable in connection therewith, and for the terms and conditions
upon which the maturity of this Term Note II may be accelerated and the unpaid
balance of principal and accrued interest thereon declared immediately due and
payable.
If any installment of principal or interest due under the
terms of this Term Note II falls due on a day which is not a Banking Day, the
due date shall be extended to the next succeeding Banking Day and interest will
be payable at the applicable rate for the period of such extension.
If any installment of principal or interest due under the
terms of this Term Note II prior to maturity is not paid in full when due, then
the Bank at its option and without prior notice to the Company, may assess a
late payment fee in an amount equal to the greater of $25.00 or Five Percent
(5%) of the amount past due up to the maximum of $1,500.00 per late charge. Each
late payment fee assessed shall be due and payable on the earlier of the next
regularly scheduled principal or interest payment date or the maturity of this
Term Note II. Waiver by the Bank of any late payment fee assessed, or the
failure of the Bank in any instance to assess a late payment fee shall not be
construed as a waiver by the Bank of its right to assess late payment fees
thereafter.
All amounts payable under this Term Note II shall be payable
without relief from valuation and appraisement laws, and with all collection
costs and attorneys' fees.
The holder of this Term Note II, at its option, may make
extensions of time for payment of the indebtedness evidenced by this Term Note
II, or reduce the payments thereon, release any collateral securing payment of
such indebtedness or accept a renewal note or notes therefor, all without notice
to Company or any endorser(s), and Company and all endorsers hereby severally
consent to any such extensions, reductions, releases and renewals, all without
notice, and agree that any such action shall not release or discharge any of
them from any liability hereunder. Company and endorser(s), jointly and
severally, waive demand, presentment for payment, protest, notice of protest and
notice of nonpayment or dishonor of this Term Note II and each of them consents
to all extensions of the time of payment thereof.
This Term Note II is made under and will be governed in all
cases by the substantive laws of the State of Indiana, notwithstanding the fact
that Indiana conflicts of laws rules might otherwise require the substantive
rules of law of another jurisdiction to apply.
USRR ACQUISITION CORP.,
an Indiana corporation
By:______________________________________
Name: Xxxxxxxxxxx Xxxxxx
Title: Secretary
List of Schedules
To December 29, 2000
Credit Agreement between
USRR Acquisition Corp. and
Bank One, Indiana, N.A.
Schedule No. Description
3.01(k) Environmental Matters
3.01(n) Acquisition Documents
5.02(b)(7) Permitted Liens
5.02(k) Existing Debt
