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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of March 31, 2000, is by and
between RTW, INC., a Minnesota corporation (the "Borrower"), and U.S. BANK
NATIONAL ASSOCIATION, a national banking association (the "Bank").
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Defined Terms. As used in this Agreement the
following terms shall have the following respective meanings (and such meanings
shall be equally applicable to both the singular and plural form of the terms
defined, as the context may require):
"ACIC": American Compensation Insurance Company, a Minnesota
corporation.
"Adjusted Capital": The Adjusted Capital of ACIC (as such
formula is determined by the NAIC). In the event that there is a conflict
between the Adjusted Capital formulas adopted by the NAIC and the Insurance
Regulatory Authority, the calculation adopted by the Insurance Regulatory
Authority shall govern.
"Adjusted Eurodollar Rate": With respect to each Interest
Period applicable to a Eurodollar Rate Advance, the rate (rounded upward, if
necessary, to the next one hundredth of one percent) determined by dividing the
Eurodollar Rate for such Interest Period by 1.00 minus the Eurodollar Reserve
Percentage.
"Advance": Any portion of the outstanding Loans as to which
one of the available interest rate options and, if pertinent, an Interest
Period, is applicable. An Advance may be a Eurodollar Rate Advance, a Negotiated
Rate Advance or a Reference Rate Advance.
"Affiliate": When used with reference to any Person, (a) each
Person that, directly or indirectly, controls, is controlled by or is under
common control with, the Person referred to, (b) each Person which beneficially
owns or holds, directly or indirectly, five percent or more of any class of
voting stock of the Person referred to (or if the Person referred to is not a
corporation, five percent or more of the equity interest), (c) each Person, five
percent or more of the voting stock (or if such Person is not a corporation,
five percent or more of the equity interest) of which is beneficially owned or
held, directly or indirectly, by the Person referred to, and (d) each of such
Person's officers, directors, joint venturers and partners. The term control
(including the terms "controlled by" and "under common control with") means the
possession, directly, of the power to direct or cause the direction of the
management and policies of the Person in question.
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"Amounts Available for Dividends": For any fiscal year of
ACIC, the maximum amount of dividends ACIC is permitted to pay for such fiscal
year under the Applicable Insurance Code without necessitating approval of the
Insurance Regulatory Authority.
"Annual Statement": As to ACIC, the annual financial
statements of ACIC as required to be filed with the Insurance Regulatory
Authority, together with all exhibits and schedules filed therewith, prepared in
conformity with SAP. References to amounts on particular exhibits, schedules,
lines, pages and columns of the Annual Statement are based on the format
promulgated by the NAIC for Property and Casualty Insurance Company Annual
Statements. If such format is changed in future years so that different
information is contained in such items or they no longer exist, it is understood
that the reference is to information consistent with that reported in the
referenced item in the 1999 Annual Statement of ACIC.
"Applicable Insurance Code": As to ACIC, the insurance code of
the State of Minnesota and any successor statute of similar import, together
with the regulations thereunder, as amended or otherwise modified and in effect
from time to time. References to sections of the Applicable Insurance Code shall
be construed to also refer to successor sections.
"Applicable Margin": The Applicable Margin for Reference Rate
Advances in effect at all times shall be zero percent (0.00%). The Applicable
Margin for Eurodollar Rate Advances in effect during the period beginning on the
Closing Date and ending February 28, 2001 shall be 2.40%. The Applicable Margin
in effect for the three months period beginning March 1, 2001 and ending May 31,
2001 and for each succeeding three-months period consisting of the months of
June through August, September through November, December through February and
March through May, respectively (each, an "Applicable Margin Effective Period"),
shall be based on the Fixed Charge Coverage Ratio determined as of the last day
of the last preceding fiscal quarter of the Borrower in accordance with the
following table:
Fixed Charge Applicable Margin for
Coverage Ratio Eurodollar Rate Advances
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Equal to or less than 2.00 to 1.00 2.75%
Equal to or less than 3.00 to 1.00
but greater than 2.00 to 1.00 2.40%
Greater than 3.00 to 1.00 1.90%
If the Borrower shall fail to provide to the Bank a Compliance Certificate for
any fiscal quarter within the time prescribed in Section 5.1(b), then until such
Compliance Certificate is provided, the Fixed Charge Coverage Ratio for such
fiscal quarter shall be deemed to be equal to or less than 2.00 to 1.00. The
Applicable Margin(s) for any Eurodollar Rate Advance shall be based on the
Applicable Margin(s)
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in effect for the Applicable Margin Effective Period(s) (or, if more than one,
the portions thereof) included in the Interest Period for such Eurodollar Rate
Advance.
"Bank": As defined in the opening paragraph hereof.
"Board": The Board of Governors of the Federal Reserve System
or any successor thereto.
"Borrower": As defined in the opening paragraph hereof.
"Business Day": Any day (other than a Saturday, Sunday or
legal holiday in the State of Minnesota) on which national banks are permitted
to be open in Minneapolis, Minnesota.
"Capital and Surplus": As to ACIC, as of any date, the total
amount shown on line 27, page 3, column 1 of the Annual Statement of ACIC, or an
amount determined in a consistent manner for any date other than one as of which
an Annual Statement is prepared.
"Capital Expenditures": For any period, the sum of all amounts
that would, in accordance with GAAP, be included as additions to property, plant
and equipment on a consolidated statement of cash flows for the Borrower during
such period, in respect of (a) the acquisition, construction, improvement,
replacement or betterment of land, buildings, machinery, equipment or of any
other fixed assets or leaseholds, (b) to the extent related to and not included
in (a) above, materials, contract labor (excluding expenditures properly
chargeable to repairs or maintenance in accordance with GAAP), and (c) other
capital expenditures and other uses recorded as capital expenditures or similar
terms having substantially the same effect.
"Capitalized Lease": A lease of (or other agreement conveying
the right to use) real or personal property with respect to which at least a
portion of the rent or other amounts thereon constitute Capitalized Lease
Obligations.
"Capitalized Lease Obligations": As to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real or personal property which
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board), and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP (including such
Statement No. 13).
"Change of Control": The occurrence, after the Closing Date,
of any of the following circumstances: (a) any Person or two or more Persons
acting in concert acquiring beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934), directly or indirectly, of securities of the Borrower (or other
securities convertible into such securities) representing 15% or more of the
combined voting power of all
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securities of the Borrower entitled to vote in the election of directors; or (b)
during any period of up to twelve consecutive months, whether commencing before
or after the Closing Date, individuals who at the beginning of such twelve-month
period were directors of the Borrower ceasing for any reason to constitute a
majority of the Board of Directors of the Borrower (other than by reason of
death, disability or scheduled retirement); provided, however, that the
replacement of Xxxxx X. Xxxxxxx or J. Xxxxxxxxx Xxxxxxxx as members of the Board
of Directors of the Borrower shall be excluded for purposes of determining
whether there has been a Change in Control under this clause (b) within any
twelve-month period; or (c) any Person or two or more Persons acting in concert
acquiring by contract or otherwise, or entering into a contract which will
result in its or their acquisition of, control over securities of the Borrower
(or other securities convertible into such securities) representing 15% or more
of the combined voting power of all securities of the Borrower entitled to vote
in the election of directors.
"Closing Date": Any Business Day selected by the Borrower for
the making of the first Loans hereunder; provided, that all the conditions
precedent to the obligation of the Bank to make such Loans, as set forth in
Article III, have been, or, on such Closing Date, will be, satisfied.
"Code": The Internal Revenue Code of 1986, as amended.
"Consolidated Net Income": For any period, the consolidated
net income of the Borrower and its Subsidiaries for such period as determined in
accordance with GAAP.
"Consolidated Net Worth": As of any date of determination, the
consolidated shareholders' equity of the Borrower and its Subsidiaries, as
determined on a consolidated basis in accordance with GAAP; provided that, for
purposes of computing Consolidated Net Worth, the ongoing effect of Statement of
Financial Accounting Standards no. 115 ("Accounting for Certain Investments in
Debt and Equity Securities") ("FASB 115") shall be excluded.
"Contingent Obligation": With respect to any Person at the
time of any determination, without duplication, any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in any
manner, whether directly or otherwise: (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or to purchase
(or to advance or supply funds for the purchase of) any direct or indirect
security therefor, (b) to purchase property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness, (c) to maintain working capital, equity capital or other financial
statement condition of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or otherwise to protect the owner thereof against loss
in respect thereof, or (d) entered into for the purpose of assuring in any
manner the owner of such Indebtedness of the payment of such Indebtedness or to
protect the owner against loss in respect thereof; provided, that the term
"Contingent Obligation" shall not include endorsements for collection or
deposit, in each case in the ordinary course of business.
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"Default": Any event which, with the giving of notice (whether
such notice is required under Section 7.1, or under some other provision of this
Agreement, or otherwise) or lapse of time, or both, would constitute an Event of
Default.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate": Any trade or business (whether or not
incorporated) that is a member of a group of which the Borrower is a member and
which is treated as a single employer under Section 414 of the Code.
"Eurodollar Business Day": A Business Day which is also a day
for trading by and between banks in United States dollar deposits in the
interbank Eurodollar market and a day on which banks are open for business in
New York City.
"Eurodollar Rate": With respect to each Interest Period
applicable to a Eurodollar Rate Advance, the average offered rate for deposits
in United States dollars (rounded upward, if necessary, to the nearest 1/16 of
1%) for delivery of such deposits on the first day of such Interest Period, for
the number of days in such Interest Period, which appears on the Reuters Screen
LIBO page as of 10:00 a.m., London time (or such other time as of which such
rate appears) two Eurodollar Business Days prior to the first day of such
Interest Period, or the rate for such deposits determined by the Bank at such
time based on such other published service of general application as shall be
selected by the Bank for such purpose; provided, that in lieu of determining the
rate in the foregoing manner, the Bank may determine the rate based on rates at
which United States dollar deposits are offered to the Bank in the interbank
Eurodollar market at such time for delivery in Immediately Available Funds on
the first day of such Interest Period in an amount approximately equal to the
Advance by the Bank to which such Interest Period is to apply (rounded upward,
if necessary, to the nearest 1/16 of 1%). "Reuters Screen LIBO page" means the
display designated as page "LIBO" on the Reuters Monitor Money Rate Screen (or
such other page as may replace the LIBO page on such service for the purpose of
displaying London interbank offered rates of major banks for United States
dollar deposits).
"Eurodollar Rate Advance": An Advance with respect to which
the interest rate is determined by reference to the Adjusted Eurodollar Rate.
"Eurodollar Reserve Percentage": As of any day, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board for determining the maximum reserve requirement
(including any basic, supplemental or emergency reserves) for a member bank of
the Federal Reserve System, with deposits comparable in amount to those held by
the Bank, in respect of "Eurocurrency Liabilities" as such term is defined in
Regulation D of the Board. The rate of interest applicable to any outstanding
Eurodollar Rate Advances shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Percentage.
"Event of Default": Any event described in Section 7.1.
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"Fixed Charge Coverage Ratio": As of the last day of any
fiscal quarter of the Borrower, the ratio of:
(a) an amount equal to the sum of (i) the Amount Available for
Dividends for the period of four consecutive fiscal quarters ending on
such day, plus (ii) the operating gain (loss) of the Borrower, on a
non-consolidated basis, for such period, plus (iii) the tax benefit of
interest expense of the Borrower for such period determined on a
non-consolidated basis, to
(b) an amount equal to the sum of (i) interest expense of the
Borrower for such period determined on a non-consolidated basis, plus
(ii) one-fifth (1/5th) the aggregate principal amount of Indebtedness
of the Borrower outstanding on such day determined on a non-
consolidated basis.
"Fixed Rate Advance": A Negotiated Rate Advance or a
Eurodollar Rate Advance.
"GAAP": Generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of any
date of determination.
"Immediately Available Funds": Funds with good value on the
day and in the city in which payment is received.
"Indebtedness": With respect to any Person at the time of any
determination, without duplication, all obligations, contingent or otherwise, of
such Person which in accordance with GAAP should be classified upon the balance
sheet of such Person as liabilities, but in any event including: (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (c)
all obligations of such Person upon which interest charges are customarily paid
or accrued, (d) all obligations of such Person under conditional sale or other
title retention agreements relating to property purchased by such Person, (e)
all obligations of such Person issued or assumed as the deferred purchase price
of property or services, (f) all obligations of others secured by any Lien on
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Capitalized Lease Obligations of such
Person, (h) all obligations of such Person in respect of interest rate
protection agreements, (i) all obligations of such Person, actual or contingent,
as an account party in respect of letters of credit or bankers' acceptances, (j)
all obligations of any partnership or joint venture as to which such Person is
or may become personally liable, and (k) all Contingent Obligations of such
Person.
"Insurance Regulatory Authority": With respect to ACIC, the
Insurance Division of the Department of Commerce of the State of Minnesota with
which ACIC is required to file its Annual Statement and which exercises
regulatory authority over the primary businesses being conducted by ACIC.
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"Interest Period": (a) With respect to each Eurodollar Rate
Advance, the period commencing on the date of such Advance or on the last day of
the immediately preceding Interest Period, if any, applicable to an outstanding
Advance and ending one, two, three or six months thereafter, as the Borrower may
elect in the applicable notice of borrowing, continuation or conversion;
provided that:
(1) Any Interest Period that would otherwise end on a
day which is not a Eurodollar Business Day shall be extended to the
next succeeding Eurodollar Business Day unless such Eurodollar Business
Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Eurodollar Business Day;
(2) Any Interest Period that begins on the last
Eurodollar Business Day of a calendar month (or a day for which there
is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Eurodollar Business Day of
a calendar month;
(3) Any Interest Period that would otherwise end
after the Revolving Commitment Ending Date shall end on the Revolving
Commitment Ending Date; and
(4) Any Interest Period that would otherwise end
after the Term Maturity Date shall end on the Term Maturity Date.
(b) With respect to each Negotiated Rate Advance, the period commencing
on the date of such Advance or on the last day of the immediately preceding
Interest Period, if any, applicable to an outstanding Advance and ending on such
date thereafter, as the Borrower may specify (if the Bank shall so agree in
writing) in the applicable notice of borrowing, continuation or conversion;
provided that:
(1) No Interest Period shall be for less than one
year, or for more than three years;
(2) Any Interest Period that would otherwise end on a
day which is not a Business Day shall be extended to the next
succeeding Business Day;
(3) Any Interest Period applicable to a Revolving
Loan that would otherwise end after the Revolving Commitment Ending
Date shall end on the Revolving Commitment Ending Date; and
(4) Any Interest Period applicable to the Term Loan
that would otherwise end after the Term Maturity Date shall end on the
Term Maturity Date.
"Investment": The acquisition, purchase, making or holding of
any stock or other security, any loan, advance, contribution to capital,
extension of credit (except for trade and customer accounts receivable for
inventory sold or services rendered in the ordinary course of business and
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payable in accordance with customary trade terms), any acquisitions of real or
personal property (other than real and personal property acquired in the
ordinary course of business) and any purchase or commitment or option to
purchase stock or other debt or equity securities of or any interest in another
Person or any integral part of any business or the assets comprising such
business or part thereof.
"Investment Grade Securities": (a) Investments which are rated
at least "BBB-" by Standard & Poor's, "Baa-3" by Moody's, " or "NAIC 2" by the
NAIC, and (b) municipal bonds which are rated at least "SP-2" by Standard &
Poor's, "Baa-3" or "MIG4" by Moody's, or "NAIC 2" by the NAIC.
"Lien": With respect to any Person, any security interest,
mortgage, pledge, lien, charge, encumbrance, title retention agreement or
analogous instrument or device (including the interest of each lessor under any
Capitalized Lease), in, of or on any assets or properties of such Person, now
owned or hereafter acquired, whether arising by agreement or operation of law.
"Loan": A Revolving Loan or the Term Loan.
"Loan Documents": This Agreement, the Notes and the Security
Documents.
"Material Adverse Occurrence": Any occurrence of whatsoever
nature (including, without limitation, any adverse final determination in any
litigation, arbitration, or governmental investigation or proceeding upon which
either (a) an enforcement proceeding shall have been commenced by any creditor
upon a judgment or order; or (b) there shall be any period of ten (10)
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect) which
materially and adversely affects the financial condition or operations of the
Borrower or of any Subsidiary or materially and adversely impairs the ability of
the Borrower to perform its obligations under any of the Loan Documents.
"Moody's": Xxxxx'x Investors Service, Inc. and any successor
thereto.
"Multiemployer Plan": A multiemployer plan, as such term is
defined in Section 4001(a)(3) of ERISA, which is maintained (on the Closing
Date, within the five years preceding the Closing Date, or at any time after the
Closing Date) for employees of the Borrower or any ERISA Affiliate.
"Negotiated Rate": Such rate per annum as the Borrower and the
Bank may agree upon in writing with respect to all or any specified portion of a
Loan for a specified Interest Period.
"Negotiated Rate Advance": An Advance with respect to which
the interest rate is determined by reference to a Negotiated Rate.
"NAIC": National Association of Insurance Commissioners, or
any successor organization.
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"Notes": Collectively, the Revolving Note and the Term Note.
"Obligations": The Borrower's obligations in respect of the
due and punctual payment of principal and interest on the Notes when and as due,
whether by acceleration or otherwise and all fees, expenses, indemnities,
reimbursements and other obligations of the Borrower under this Agreement or any
other Loan Document, in all cases whether now existing or hereafter arising or
incurred.
"PBGC": The Pension Benefit Guaranty Corporation, established
pursuant to Subtitle A of Title IV of ERISA, and any successor thereto or to the
functions thereof.
"Person": Any natural person, corporation, partnership,
limited partnership, limited liability company, joint venture, firm,
association, trust, unincorporated organization, government or governmental
agency or political subdivision or any other entity, whether acting in an
individual, fiduciary or other capacity.
"Plan": Each employee benefit plan (whether in existence on
the Closing Date or thereafter instituted), as such term is defined in Section 3
of ERISA, maintained for the benefit of employees, officers or directors of the
Borrower or of any ERISA Affiliate.
"Pledge Agreement": The Pledge Agreement of even date herewith
between the Borrower and the Bank, as the same may be amended, supplemented,
restated or otherwise modified in writing from time to time by the Borrower and
the Bank.
"Prohibited Transaction": The respective meanings assigned to
such term in Section 4975 of the Code and Section 406 of ERISA.
"Reference Rate": The rate of interest from time to time
publicly announced by the Bank as its "reference rate." The Bank may lend to its
customers at rates that are at, above or below the Reference Rate. For purposes
of determining any interest rate hereunder or under any other Loan Document
which is based on the Reference Rate, such interest rate shall change as and
when the Reference Rate shall change.
"Reference Rate Advance": An Advance with respect to which the
interest rate is determined by reference to the Reference Rate.
"Regulatory Action": Any cease and desist order, letter
agreement, memorandum, or other similar regulatory action taken by a state or
federal banking agency or other Person to which either the Borrower or any
Subsidiary is subject.
"Regulatory Change": Any change after the Closing Date in
federal, state or foreign laws or regulations or the adoption or making after
such date of any interpretations, directives or requests applying to a class of
banks including the Bank under any federal, state or foreign laws or
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regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"Reportable Event": A reportable event as defined in Section
4043 of ERISA and the regulations issued under such Section, with respect to a
Plan, excluding, however, such events as to which the PBGC by regulation has
waived the requirement of Section 4043(a) of ERISA that it be notified within 30
days of the occurrence of such event, provided that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any waiver in
accordance with Section 412(d) of the Code.
"Restricted Payments": With respect to the Borrower,
collectively, all dividends or other distributions of any nature (cash,
securities other than common stock of the Borrower, assets or otherwise), and
all payments on any class of equity securities (including warrants, options or
rights therefor) issued by the Borrower, whether such securities are authorized
or outstanding on the Closing Date or at any time thereafter and any redemption
or purchase of, or distribution in respect of, any of the foregoing, whether
directly or indirectly.
"Revolving Commitment": The agreement of the Bank to make
Revolving Loans to the Borrower in an aggregate principal amount outstanding at
any time not to exceed the Bank's Revolving Commitment Amount upon the terms and
subject to the conditions and limitations of this Agreement.
"Revolving Commitment Amount": $2,000,000, but as the same may
be reduced from time to time pursuant to Section 2.9.
"Revolving Commitment Ending Date": March 30, 2001, but as
such date may be extended pursuant to Section 2.21.
"Revolving Loan": As defined in Section 2.1.
"Revolving Loan Date": The date of the making of any Revolving
Loan hereunder.
"Revolving Maturity Date": The earliest of (a) the Revolving
Commitment Ending Date, (b) the date on which the Revolving Commitment is
terminated pursuant to Section 7.2 hereof or (c) the date on which the Revolving
Commitment Amount is reduced to zero pursuant to Section 2.9 hereof.
"Revolving Note": A promissory note of the Borrower in the
form of Exhibit 1.1A hereto.
"Risk-Based Capital": The Company Action Level of ACIC (as
such formula is determined by the NAIC). In the event that there is a conflict
between the Risk-Based Capital formulas adopted by the NAIC and the Insurance
Regulatory Authority, the calculation adopted by the Insurance Regulatory
Authority shall govern.
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"SAP": As to any insurance company, the statutory accounting
practices prescribed or permitted by the Insurance Regulatory Authority.
"Security Documents": The Pledge Agreement and any other
security agreements, mortgages or other collateral security documents to be
delivered to the Bank in connection with this Agreement and any and all Uniform
Commercial Code financing statements relating thereto.
"Statutory Net Income": With respect to ACIC for any period,
the amount reported for such period on line 16, page 4, column 1 of the Annual
Statement of ACIC, or an amount determined in a consistent manner for any period
other than the one for which an Annual Statement is prepared.
"Subsidiary": Any corporation or other entity of which
securities or other ownership interests having ordinary voting power for the
election of a majority of the board of directors or other Persons performing
similar functions are owned by the Borrower either directly or through one or
more Subsidiaries.
"Term Commitment": The agreement of the Bank to make the Term
Loan to the Borrower in an amount equal to the Term Commitment Amount upon the
terms and subject to the conditions and limitations of this Agreement.
"Term Commitment Amount": $8,000,000.
"Term Maturity Date": The earlier of (a) March 31, 2005, or
(b) the date on which the Term Commitment is terminated pursuant to Section 7.2
hereof.
"Term Loan": As defined in Section 2.1.
"Term Note": A promissory note of the Borrower in the form of
Exhibit 1.1B hereto.
"Unused Revolving Commitment": As of any date of
determination, the amount by which the Bank's Revolving Commitment Amount
exceeds the principal amount of unpaid Revolving Loans outstanding on such date.
"Unused Revolving Commitment Fees": As defined in Section
2.10.
Section 1.2 Accounting Terms and Calculations. Except as may
be expressly provided to the contrary herein, all accounting terms used herein
shall be interpreted and all accounting determinations hereunder shall be made
in accordance with GAAP. To the extent any change in GAAP affects any
computation or determination required to be made pursuant to this Agreement,
such computation or determination shall be made as if such change in GAAP had
not occurred unless the Borrower and the Bank agree in writing on an adjustment
to such computation or determination to account for such change in GAAP.
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Section 1.3 Computation of Time Periods. In this Agreement, in
the computation of a period of time from a specified date to a later specified
date, unless otherwise stated the word "from" means "from and including" and the
word "to" or "until" each means "to but excluding".
Section 1.4 Other Definitional Terms. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. References to Sections, Exhibits, schedules and like references
are to this Agreement unless otherwise expressly provided. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". Unless the context in which used herein otherwise clearly requires,
"or" has the inclusive meaning represented by the phrase "and/or".
ARTICLE II
TERMS OF THE CREDIT FACILITIES
Section 2.1 Lending Commitments.
2.1(a) Revolving Commitment. On the terms and subject to the
conditions hereof, the Bank agrees to make loans (each, a "Revolving Loan" and,
collectively, the "Revolving Loans") to the Borrower on a revolving basis at any
time and from time to time from the Closing Date to the Revolving Maturity Date,
during which period the Borrower may borrow, repay and reborrow in accordance
with the provisions hereof, provided, that the unpaid principal amount of
outstanding Revolving Loans shall not at any time exceed the Revolving
Commitment Amount. A Revolving Loan may be obtained and maintained, at the
election of the Borrower but subject to the limitations hereof, as a Reference
Rate Advance, one or more Eurodollar Rate Advances, one or more Negotiated Rate
Advances or any combination thereof, provided that no more than five (5)
Advances (whether a Reference Rate Advance, one or more Eurodollar Rate
Advances, one or more Negotiated Rate Advances or a combination thereof, and
treating all Reference Rate Advances as a single advance and Fixed Rate Advances
with different Interest Periods as separate Advances) shall be outstanding under
the Revolving Note at any time.
2.1(b) Term Loan. On the terms and subject to the conditions
hereof, the Bank agrees to make a loan (the "Term Loan") to the Borrower in an
amount equal to the Term Commitment Amount, which shall be disbursed on the
Closing Date. The Term Loan may be obtained and maintained, at the election of
the Borrower but subject to the limitations hereof, as a Reference Rate Advance,
one or more Eurodollar Rate Advances, one or more Negotiated Rate Advances or
any combination thereof, provided that no more than five (5) Advances (whether a
Reference Rate Advance, one or more Eurodollar Rate Advances, one or more
Negotiated Rate Advances or a combination thereof, and treating all Reference
Rate Advances as a single Advance and Fixed Rate Advances with different
Interest Periods as separate Advances) shall be outstanding under the Term Note
at any time.
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Section 2.2 Procedure for Revolving Loans. Any request by the
Borrower for a Revolving Loan hereunder shall be in writing and must be given so
as to be received by the Bank not later than (a) 12:00 noon (Minneapolis time)
two Eurodollar Business Days prior to the requested Revolving Loan Date if such
Revolving Loan (or any portion thereof) is requested as one or more Eurodollar
Rate Advances and (b) 12:00 noon (Minneapolis time) on the requested Revolving
Loan Date if such Revolving Loan (or any portion thereof) is requested as one or
more Negotiated Rate Advances or as a Reference Rate Advance. Each request for a
Revolving Loan hereunder shall be irrevocable and shall be deemed a
representation by the Borrower that on the requested Revolving Loan Date and
after giving effect to the requested Revolving Loan the applicable conditions
specified in Article III have been and will be satisfied. Each request for a
Revolving Loan hereunder shall specify (i) the requested Revolving Loan Date,
(ii) the amount of Revolving Loan to be made on such date, provided that any
portion thereof which is to be funded as a Fixed Rate Advance shall be in a
minimum amount of $100,000 or, if more, an integral multiple thereof, (iii)
whether such Revolving Loan is to be funded as a Reference Rate Advance, one or
more Eurodollar Rate Advances or one or more Negotiated Rate Advances (and, if
such Revolving Loan is to be made with more than one applicable interest rate
choice, specifying the amount to which each interest rate choice is applicable),
and (iv) in the case of Fixed Rate Advances, the duration of the initial
Interest Periods applicable thereto. Unless the Bank determines that any
applicable condition specified in Article III has not been satisfied, the Bank
will make available to the Borrower at the Bank's principal office in
Minneapolis, Minnesota in Immediately Available Funds not later than 4:00 p.m.
(Minneapolis time) on the requested Revolving Loan Date the amount of the
requested Revolving Loan.
Section 2.3 Procedure for Term Loan. Not later than (a) 12:00
noon (Minneapolis time) two Eurodollar Business Days prior to the Closing Date
if the Term Loan (or any portion thereof) is requested as one or more Eurodollar
Rate Advances and (b) 12:00 noon (Minneapolis time) on the Closing Date if the
Term Loan (or any portion thereof) is requested as one or more Negotiated Rate
Advances or as a Reference Rate Advance, the Borrower shall notify the Bank in
writing of its notice of borrowing. The request for the Term Loan hereunder
shall be irrevocable and shall be deemed a representation by the Borrower that
on the Closing Date and after giving effect to the Term Loan the applicable
conditions specified in Article III have been and will be satisfied. The request
for the Term Loan hereunder shall specify (i) the Closing Date, (ii) whether the
Term Loan is to be funded as a Reference Rate Advance, one or more Eurodollar
Rate Advances or one or more Negotiated Rate Advances (and, if the Term Loan is
to be made with more than one applicable interest rate choice, specifying the
amount to which each interest rate choice is applicable), and (iii) in the case
of Fixed Rate Advances, the duration of the initial Interest Periods applicable
thereto. Any portion of the Term Loan which is to be funded as a Fixed Rate
Advance shall be in a minimum amount of $100,000 or, if more, an integral
multiple thereof. Unless the Bank determines that any applicable condition
specified in Article III has not been satisfied, the Bank will make the Term
Loan available to the Borrower at the Bank's principal office in Minneapolis,
Minnesota in Immediately Available Funds not later than 4:00 p.m. (Minneapolis
time) on the Closing Date.
Section 2.4 Notes. The Revolving Loans shall be evidenced by a
single Revolving Note payable to the order of the Bank in a principal amount
equal to the Revolving Commitment
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Amount originally in effect. The Term Loan shall be evidenced by a single Term
Note payable to the order of the Bank in a principal amount equal to the Term
Commitment Amount. The Bank shall enter in its ledgers and records the amount of
each Loan, the various Advances made, converted or continued and the payments
made thereon, and the Bank is authorized by the Borrower to enter on a schedule
attached to the applicable Note a record of such Loans, Advances and payments;
provided, however, that the failure by the Bank to make any such entry or any
error in making such entry shall not limit or otherwise affect the obligation of
the Borrower hereunder and on the Notes, and, in all events, the principal
amounts owing by the Borrower in respect of the Revolving Note shall be the
aggregate amount of all Revolving Loans less all payments of principal thereof
made by the Borrower, and, in all events, the principal amount owing by the
Borrower in respect of the Term Note shall be the amount of the Term Loan less
all payments of principal thereof made by the Borrower.
Section 2.5 Conversions and Continuations. On the terms and
subject to the limitations hereof, the Borrower shall have the option at any
time and from time to time to convert all or any portion of the Advances into
Reference Rate Advances, Eurodollar Rate Advances or Negotiated Rate Advances,
or to continue a Eurodollar Rate Advance as such (subject, however, to the
proviso set forth in the last sentence of Section 2.1(a) and the proviso set
forth in the last sentence of Section 2.1(b)); provided, however, that a Fixed
Rate Advance may be converted or continued only on the last day of the Interest
Period applicable thereto and no Advance may be converted or continued as a
Fixed Rate Advance if a Default or Event of Default has occurred and is
continuing on the proposed date of continuation or conversion. Advances may be
converted to, or continued as, Fixed Rate Advances only in integral multiples of
$100,000. The Borrower shall give the Bank written notice of any continuation or
conversion of any Advances and such notice must be given so as to be received by
the Bank not later than 12:00 noon (Minneapolis time) two Eurodollar Business
Days prior to requested date of conversion or continuation in the case of the
continuation of, or conversion to, Eurodollar Rate Advances and not later than
12:00 noon (Minneapolis time) on the date of the requested conversion to
Negotiated Rate Advances or Reference Rate Advances. Each such notice shall
specify (a) the amount to be continued or converted, (b) the date for the
continuation or conversion (which must be (i) the last day of the preceding
Interest Period for any continuation or conversion of Fixed Rate Advances, (ii)
a Eurodollar Business Day in the case of conversions to or continuations as
Eurodollar Advances, and (iii) a Business Day in the case of conversions to
Negotiated Rate Advances or Reference Rate Advances), and (c) in the case of
conversions to or continuations as Fixed Rate Advances, the Interest Period
applicable thereto. Any notice given by the Borrower under this Section shall be
irrevocable. If the Borrower shall fail to notify the Bank of the continuation
of any Fixed Rate Advances or of the conversion of Eurodollar Rate Advances to
Negotiated Rate Advances within the time required by this Section, such Advances
shall, on the last day of the Interest Period applicable thereto, automatically
be converted into Reference Rate Advances of the same principal amount.
Section 2.6 Interest Rates, Interest Payments and Default
Interest. Interest shall accrue and be payable on the Loans as follows:
(a) Subject to paragraph (d) below, each Eurodollar
Rate Advance shall bear interest on the unpaid principal amount thereof
during the Interest Period applicable thereto at a
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rate per annum equal to the sum of (i) the Adjusted Eurodollar Rate for
such Interest Period, plus (ii) the Applicable Margin.
(b) Subject to paragraph (d) below, each Negotiated
Rate Advance shall bear interest on the unpaid principal amount thereof
during the Interest Period applicable thereto at a rate per annum equal
to the applicable Negotiated Rate.
(c) Subject to paragraph (d) below, each Reference
Rate Advance shall bear interest on the unpaid principal amount thereof
at a varying rate per annum equal to the sum of (i) the Reference Rate,
plus (ii) the Applicable Margin.
(d) Upon the occurrence of any Event of Default, each
Advance shall, at the option of the Bank, bear interest until paid in
full at a rate per annum equal to the sum of (i) the Reference Rate,
plus (ii) the Applicable Margin for Reference Rate Advances, plus (iii)
2.0%.
(e) Interest shall be payable (i) with respect to
each Advance, on each March 31, June 30, September 30 and December 31
and, in the case of a Fixed Rate Advance, on the last day of the
Interest Period applicable thereto; (ii) with respect to all Advances,
upon any permitted prepayment (on the amount prepaid); (iii) with
respect to all Advances under the Revolving Note, on the Revolving
Maturity Date; and (iv) with respect to all Advances under the Term
Note, on the Term Maturity Date; provided that interest under Section
2.6(d) shall be payable on demand.
Section 2.7 Repayment and Mandatory Prepayment.
2.7(a) The Revolving Loans. The unpaid principal amount of all
Revolving Loans, together with all accrued and unpaid interest thereon, shall be
due and payable on the Revolving Maturity Date. If at any time the unpaid
principal balance of the Revolving Note exceeds the Revolving Commitment Amount,
the Borrower shall immediately repay to the Bank the amount of such excess. Any
such payments shall be applied first against Reference Rate Advances and then to
Fixed Rate Advances in order starting with the Fixed Rate Advances having the
shortest time to the end of the applicable Interest Period.
2.7(b) The Term Loan. The principal of the Term Loan shall be
payable as provided in the Term Note.
Section 2.8 Optional Prepayments. The Borrower may prepay
Fixed Rate Advances in whole or in part at any time, subject, however, to
Section 2.18 and Section 2.20. The Borrower may prepay Reference Rate Advances
in whole or in part at any time without premium or penalty. Any prepayment
pursuant to this Section 2.8 must be accompanied by accrued and unpaid interest
on the amount prepaid. Each partial prepayment shall be in an aggregate amount
for any Note of $100,000 or an integral multiple thereof. Amounts paid (unless
following an acceleration or upon termination of the Revolving Commitment in
whole) or prepaid on the Revolving Note under this Section 2.8 may be
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reborrowed upon the terms and subject to the conditions and limitations of this
Agreement. Amounts paid or prepaid on the Term Note may not be reborrowed, and
amounts prepaid on the Term Note shall be applied against the next principal
payment required under the terms of the Term Note.
Section 2.9 Optional Reduction of Revolving Commitment Amount
or Termination of Revolving Commitment. The Borrower may, at any time, upon not
less than 20 Business Days prior written notice to the Bank, reduce the
Revolving Commitment Amount, with any such reduction in a minimum amount
$500,000, or, if more, in an integral multiple thereof; provided, however, that
the Borrower may not at any time reduce the Revolving Commitment Amount below
the unpaid principal balance of the Revolving Note. The Borrower may, at any
time, upon not less than 20 Business Days prior written notice to the Bank,
terminate the Revolving Commitment in its entirety. Upon termination of the
Revolving Commitment pursuant to this Section, the Borrower shall pay to the
Bank the entire unpaid principal balance outstanding under the Revolving Note,
all accrued and unpaid interest thereon, all unpaid Revolving Commitment Fees
accrued to the date of such termination, and any indemnities payable with
respect to Advances pursuant to Section 2.18 and Section 2.20.
Section 2.10 Fees. The Borrower shall pay to the Bank
nonrefundable fees ("Unused Revolving Commitment Fees") with respect to the
Revolving Commitment in an amount equal to 0.30% of the amount of the Unused
Revolving Commitment, payable quarterly in arrears on each March 31, June 30,
September 30 and December 31.
Section 2.11 Computation. Interest on Revolving Loans and the
Term Loan and Unused Revolving Commitment Fees shall be computed on the basis of
actual days elapsed and a year of 360 days.
Section 2.12 Payments. Payments and prepayments of principal
of, and interest on, the Notes and all fees, expenses and other obligations
under this Agreement payable to the Bank shall be made without setoff or
counterclaim in Immediately Available Funds not later than 3:00 p.m.
(Minneapolis time) on the dates called for under this Agreement and the Notes to
the Bank at its main office in Minneapolis, Minnesota. Funds received after such
time shall be deemed to have been received on the next Business Day. Whenever
any payment to be made hereunder or on the Notes shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time, in the case of a payment of
principal, shall be included in the computation of any interest on such
principal payment.
Section 2.13 Use of Loan Proceeds. The proceeds of the initial
Loans shall be used to pay existing Indebtedness of the Borrower to the Bank
under the Promissory Notes of the Borrower in favor of the Bank dated February
4, 2000 and March 14, 2000, and the remainder thereof, if any, shall be used for
the Borrower's general business purposes (including, without limitation, working
capital) in a manner not in conflict with any of the Borrower's covenants in
this Agreement.
Section 2.14 Interest Rate Not Ascertainable, Etc. If, on or
prior to the date for determining the Adjusted Eurodollar Rate in respect of the
Interest Period for any Eurodollar Rate
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Advance, the Bank determines (which determination shall be conclusive and
binding, absent manifest error) that:
(a) deposits in dollars (in the applicable amount) are not
being made available to the Bank in the relevant market for such
Interest Period, or
(b) the Adjusted Eurodollar Rate, as the case may be, will not
adequately and fairly reflect the cost to the Bank of funding or
maintaining Eurodollar Rate Advances for such Interest Period,
the Bank shall forthwith give notice to the Borrower of such determination,
whereupon the obligation of the Bank to make or continue, or to convert any
Advances to, Eurodollar Rate Advances shall be suspended until the Bank notifies
the Borrower that the circumstances giving rise to such suspension no longer
exist. While any such suspension continues, all further Advances by the Bank
shall be made as Reference Rate Advances or Negotiated Rate Advances. No such
suspension shall affect the interest rate then in effect during the applicable
Interest Period for any Eurodollar Rate Advance outstanding at the time such
suspension is imposed.
Section 2.15 Increased Cost. If any Regulatory Change:
(a) shall subject the Bank to any tax, duty or other
charge with respect to its Fixed Rate Advances, the Notes or its
obligation to make Fixed Rate Advances or shall change the basis of
taxation of payment to the Bank of the principal of or interest on its
Fixed Rate Advances or any other amounts due under this Agreement in
respect of Fixed Rate Advances or its obligation to make Fixed Rate
Advances (except for changes in the rate of tax on the overall net
income of the Bank imposed by the jurisdiction in which the Bank's
principal office is located); or
(b) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board, but excluding
with respect to any Eurodollar Rate Advance any such requirement to the
extent included in calculating the applicable Adjusted Eurodollar Rate)
against assets of, deposits with or for the account of, or credit
extended by, the Bank or shall impose on the Bank or on the United
States market for certificates of deposit or the interbank Eurodollar
market any other condition affecting Fixed Rate Advances, the Notes or
its obligation to make Fixed Rate Advances;
and the result of any of the foregoing is to increase the cost to the Bank of
making or maintaining any Fixed Rate Advance, or to reduce the amount of any sum
received or receivable by the Bank under this Agreement or under the Notes,
then, and in each such case, upon one hundred twenty (120) days notice to the
Borrower from the Bank of the nature of such Regulatory Change, the Borrower
shall pay to the Bank such additional amount or amounts as will compensate the
Bank for such increased cost or reduction for the period from and after the one
hundred twentieth (120th) day after such notice is given.
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A certificate of the Bank claiming compensation under this Section, setting
forth the additional amount or amounts to be paid to it hereunder and stating in
reasonable detail the basis for the charge and the method of computation, shall
be conclusive in the absence of manifest error. In determining such amount, the
Bank may use any reasonable averaging and attribution methods. Failure on the
part of the Bank to demand compensation for any increased costs or reduction in
amounts received or receivable with respect to any Interest Period shall not
constitute a waiver of the Bank's rights to demand compensation for any
increased costs or reduction in amounts received or receivable in any subsequent
Interest Period.
Section 2.16 Illegality. If any Regulatory Change shall make
it unlawful or impossible for the Bank to make, maintain or fund any Eurodollar
Rate Advances, the Bank shall notify the Borrower, whereupon the obligation of
the Bank to make or continue, or to convert any Advances to Eurodollar Rate
Advances shall be suspended until the Bank notifies the Borrower that the
circumstances giving rise to such suspension no longer exist. If the Bank
determines that it may not lawfully continue to maintain any Eurodollar Rate
Advances to the end of the applicable Interest Periods, all of the affected
Advances shall be automatically converted to Reference Rate Advances as of the
date of the Bank's notice, and upon such conversion the Borrower shall indemnify
the Bank in accordance with Section 2.18.
Section 2.17 Capital Adequacy. In the event that any
Regulatory Change reduces or shall have the effect of reducing the rate of
return on the Bank's capital or the capital of its parent corporation (by an
amount the Bank deems material) as a consequence of its Revolving Commitment
and/or Advances to a level below that which the Bank or its parent corporation
could have achieved but for such Regulatory Change (taking into account the
Bank's policies and the policies of its parent corporation with respect to
capital adequacy), then, in each such case, upon one hundred twenty (120) days
notice to the Borrower from the Bank, the Borrower shall pay to the Bank
additional amounts sufficient to compensate the Bank or its parent corporation
for such reduction for the period from and after the one hundred twentieth
(120th) day after such notice is given. Any determination by the Bank under this
Section and any certificate as to the amount of such reduction given to the
Borrower by the Bank shall be final, conclusive and binding for all purposes,
absent manifest error.
Section 2.18 Funding Losses; Eurodollar Rate Advances. The
Borrower shall compensate the Bank, upon its written request, for all losses,
expenses and liabilities (including any interest paid by the Bank to lenders of
funds borrowed by it to make or carry Eurodollar Rate Advances to the extent not
recovered by the Bank in connection with the reemployment of such funds and
including loss of anticipated profits) which the Bank may sustain: (i) if for
any reason, other than a default by the Bank, a funding of a Eurodollar Rate
Advance does not occur on the date specified therefor in the Borrower's request
or notice as to such Advance under Section 2.2 or 2.5, or (ii) if, for whatever
reason (including, but not limited to, mandatory and optional prepayment and
acceleration of the maturity of Advances following an Event of Default), any
prepayment or repayment of a Eurodollar Rate Advance, or a conversion pursuant
to Section 2.16, occurs on any day other than the last day of the Interest
Period applicable thereto. The Bank's request for compensation shall set forth
the basis for the amount requested and shall be final, conclusive and binding,
absent manifest error.
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Section 2.19 Discretion of Bank as to Manner of Funding. The
Bank shall be entitled to fund and maintain its funding of Eurodollar Rate
Advances in any manner it may elect, it being understood, however, that for the
purposes of this Agreement all determinations hereunder (including, but not
limited to, determinations under Section 2.18) shall be made as if the Bank had
actually funded and maintained each Eurodollar Rate Advances during the Interest
Period for such Advance through the purchase of deposits having a maturity
corresponding to the last day of the Interest Period and bearing an interest
rate equal to the Eurodollar Rate for such Interest Period.
Section 2.20 Negotiated Rate Prepayment Indemnity. The
Borrower acknowledges and agrees as follows: (i) the Borrower has no right to
repay any Negotiated Rate Advance without the Bank's consent, which the Bank
will grant only on the terms and subject to the conditions hereinafter provided;
(ii) the Bank will be harmed by reason of any prepayment of any Negotiated Rate
Advance at a time when interest rates have declined below the levels prevailing
on the date a Loan (or portion thereof) was made as or converted to a Negotiated
Rate Advance because any reinvestment of the prepaid funds at the lower rates
prevailing on the date of prepayment will produce a lower return to the Bank;
(iii) there is no readily available index of rates payable on loans such as that
from the Bank to the Borrower, nor any assurance that the Bank could replace the
loan with a similar loan; and (iv) changes in the yields on U.S. government
securities provide a reasonable approximation for changes in interest rates
generally. To induce the Bank to agree to accept voluntary prepayments, to the
extent permitted by applicable law, the Borrower agrees to pay to the Bank a
prepayment indemnity as described in this Section upon any prepayment, whether
voluntary or involuntary, and agrees to all of the other terms of prepayment
herein. For purposes of this section, the following terms shall have the
meanings given below:
"Average Maturity Period": as of any prepayment date, the
weighted average time period computed by multiplying the dollar amount of each
installment or payment of principal prepaid by the number of days from such
prepayment date until the earlier of the scheduled maturity of that installment
or payment or the next Interest Change Date (if any), adding together the
resulting products and dividing the resulting sum by the total dollar amount of
principal being prepaid.
"Government Yield": as to any date of determination, the
annual yield (converted as necessary to the equivalent semi-annual compound
rate) on a U.S. Treasury security having a maturity date closest to the date
computed by adding the Average Maturity Period to the date of prepayment, as
published in The Wall Street Journal (or, if not so published, as determined by
the Bank based on quotations by secondary market dealers selected by the Bank).
"U.S. Treasury securities" means actively traded U.S. Treasury bonds, bills and
notes. If more than one issue of U.S. Treasury securities is scheduled to mature
at or about the time of such computed date, then to the extent possible the U.S.
Treasury security trading closest to its par value will be chosen as the basis
of the Government Yield.
"Interest Change Date": the date of any regularly scheduled
adjustment in the interest rate on the Notes.
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"Interest Differential": as of any prepayment date, (i) the
applicable Negotiated Rate as in affect on the date of prepayment minus (ii) the
sum of (A) the Government Yield as of the date of prepayment, plus (B) the
Issuance Spread.
"Issuance Spread": thirty-hundredths of one percent (0.30%)
per annum.
With the prior written consent of the Bank, Negotiated Rate
Advances may be prepaid in whole or in part at any time, with partial
prepayments in the amount of $100,000 or an integral multiple thereof. Any
partial prepayments shall be applied to installments due under the applicable
Negotiated Rate Advance in the inverse order of their maturity (if such
Negotiated Rate Advance is payable in installments). If at the time of any
prepayment (whether voluntary or involuntary, and specifically including but not
limited to any payment prior to scheduled maturity following acceleration of the
Loans), the Interest Differential shall exceed zero, such prepayment shall be
accompanied, to the extent permitted by law, by payment of a prepayment
indemnity. The amount of the prepayment indemnity shall equal the present value
(determined by Bank using the Government Yield as of the date of prepayment as
the discount factor) on the prepayment date of a stream of equal monthly
payments in number equal to the number of whole months (using a thirty-day
month) in the Average Maturity Period. The amount of each such monthly payment
shall equal the quotient obtained by dividing (a) the product of the amount
prepaid, times the Interest Differential, times a fraction, the numerator of
which is the number of days in the Average Maturity Period and the denominator
of which is 360, by (b) the number of whole months (using a thirty-day month) in
the Average Maturity Period.
Section 2.21 Extension of Revolving Commitment Ending Date. If
the Borrower by written notice given to the Bank not more than 60 days prior to
the Revolving Commitment Ending Date requests in writing an extension of the
Revolving Commitment Ending Date for an additional period of time and if the
Bank, in its sole and absolute discretion and based on such review of the
Borrower's financial performance and condition and such other factors as the
Bank considers relevant (which may include, without limitation, future loan
policies and other policies adopted by the Bank unrelated to the Borrower's
financial condition), consents in writing to such extension within thirty (30)
days of receipt of the Borrower's request hereunder, then the Revolving
Commitment Ending Date shall be extended for such additional period of time, and
in such extended period the Borrower may repeat its request within the same time
limit and if the Bank consents the Revolving Commitment Ending Date shall be
further extended for an additional period, and so on from time to time. In the
case of any such extension, the "Revolving Commitment Ending Date" shall be the
last day of the period to which such extension has been granted. The Bank shall
not be under any obligation or commitment to extend the Revolving Commitment
Ending Date, and no such obligation or commitment on the part of the Bank should
be inferred from the provisions of this Section.
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ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions of Initial Transaction. The making of
the initial Loans shall be subject to the prior or simultaneous fulfillment of
the following conditions:
3.1(a) Documents. The Bank shall have received the following:
(i) A Revolving Note and a Term Note each drawn to the order
of the Bank executed by a duly authorized officer (or
officers) of the Borrower.
(ii) The Security Documents duly executed by the respective
parties thereto, together with the certificate or certificates
representing the shares of the capital stock of ACIC pledged
to the Bank under the Pledge Agreement together with separate
stock powers duly executed by the Borrower in blank (which
shall be undated).
(iii) A copy of the corporate resolution of the Borrower
authorizing the execution, delivery and performance of the
Loan Documents, certified as of the Closing Date by the
Secretary or an Assistant Secretary of the Borrower.
(iv) An incumbency certificate showing the names and titles
and bearing the signatures of the officers of the Borrower
authorized to execute the Loan Documents and to request Loans
and conversions and continuations of Advances hereunder,
certified as of the Closing Date by the Secretary or an
Assistant Secretary of the Borrower.
(v) A copy of the Articles of Incorporation of the Borrower
with all amendments thereto, certified by the appropriate
governmental official of the jurisdiction of its incorporation
as of a date satisfactory to the Bank.
(vi) A certificate of good standing for the Borrower in the
jurisdiction of its incorporation and in the State of
Minnesota, certified by the appropriate governmental officials
as of a date satisfactory to the Bank.
(vii) A copy of the bylaws of the Borrower, certified as of
the Closing Date by the Secretary or an Assistant Secretary of
the Borrower.
(viii) A certificate dated the Closing Date of the chief
executive officer or chief financial officer of the Borrower
certifying as to the matters set forth in Sections 3.2(a) and
3.2(b) below.
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(ix) The Borrower shall have requested Xxxxxxxxx & Xxxxxx
P.L.L.P., its counsel, to prepare a written opinion, addressed
to the Bank and dated the Closing Date, covering the matters
set forth in Exhibit 3.1(a)(ix) hereto, and such opinion shall
have been delivered to the Bank.
(x) UCC searches against the Borrower ordered from the
Minnesota Secretary of State.
3.1(b) Compliance. The Borrower shall have performed and
complied with all agreements, terms and conditions contained in this Agreement
required to be performed or complied with by the Borrower prior to or
simultaneously with the Closing Date.
3.1(c) Security Documents. All Security Documents (or
financing statements with respect thereto) shall have been appropriately filed
or recorded to the satisfaction of the Bank; any pledged collateral shall have
been duly delivered to the Bank; and the priority and perfection of the Liens
created by the Security Documents shall have been established to the
satisfaction of the Bank and its counsel.
3.1(d) Other Matters. All corporate and legal proceedings
relating to the Borrower and all instruments and agreements in connection with
the transactions contemplated by this Agreement shall be satisfactory in scope,
form and substance to the Bank and the Bank's counsel, and the Bank shall have
received all information and copies of all documents, including records of
corporate proceedings, as the Bank or such counsel may reasonably have requested
in connection therewith, such documents where appropriate to be certified by
proper corporate or governmental authorities.
3.1(e) Fees and Expenses. The Bank shall have received all
fees and other amounts due and payable by the Borrower on or prior to the
Closing Date, including the reasonable fees and expenses of counsel to the Bank
payable pursuant to Section 8.2.
Section 3.2 Conditions Precedent to all Loans. The obligation
of the Bank to make any Loan hereunder (including the initial Loans) shall be
subject to the fulfillment of the following conditions:
3.2(a) Representations and Warranties. The representations and
warranties contained in Article IV shall be true and correct on and as of the
Closing Date and on the date of each Loan, with the same force and effect as if
made on such date.
3.2(b) No Default. No Default or Event of Default shall have
occurred and be continuing on the Closing Date and on the date of each Loan or
will exist immediately after any Loan is made.
3.2(c) Notices and Requests. The Bank shall have received the
Borrower's request for such Loan as required under Section 2.2.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Bank to enter into this Agreement and to make
Loans hereunder, the Borrower represents and warrants to the Bank:
Section 4.1 Organization, Standing, Etc. The Borrower is a
corporation duly incorporated and validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority to carry on its business as now conducted, to
enter into this Agreement and to issue the Notes and to perform its obligations
under the Loan Documents. Each Subsidiary is a corporation duly incorporated and
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry on
its business as now conducted. Each of the Borrower and the Subsidiaries (a)
holds all certificates of authority, licenses and permits necessary to carry on
its business as presently conducted in each jurisdiction in which it is carrying
on such business, except where the failure to hold such certificates, licenses
or permits would not have a material adverse effect on the business, operations,
property, assets or condition, financial or otherwise, of the Borrower and the
Subsidiaries taken as a whole, and (b) is duly qualified and in good standing as
a foreign corporation in each jurisdiction in which the character of the
properties owned, leased or operated by it or the business conducted by it makes
such qualification necessary and the failure so to qualify would permanently
preclude the Borrower or such Subsidiary from enforcing its rights with respect
to any assets or expose the Borrower or such Subsidiary to any liability, which
in either case would be material to the Borrower and the Subsidiaries taken as a
whole.
Section 4.2 Authorization and Validity. The execution,
delivery and performance by the Borrower of the Loan Documents have been duly
authorized by all necessary corporate action by the Borrower, and this Agreement
constitutes, and the Notes and other Loan Documents when executed will
constitute, the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective terms,
subject to limitations as to enforceability which might result from bankruptcy,
insolvency, moratorium and other similar laws affecting creditors' rights
generally and subject to limitations on the availability of equitable remedies.
Section 4.3 No Conflict; No Default. The execution, delivery
and performance by the Borrower of the Loan Documents will not (a) violate any
provision of any law, statute, rule or regulation or any order, writ, judgment,
injunction, decree, determination or award of any court, governmental agency or
arbitrator presently in effect having applicability to the Borrower, (b) violate
or contravene any provision of the Articles of Incorporation or bylaws of the
Borrower, or (c) result in a breach of or constitute a default under any
indenture, loan or credit agreement or any other agreement, lease or instrument
to which the Borrower is a party or by which it or any of its properties may be
bound or result in the creation of any Lien thereunder. Neither the Borrower nor
any Subsidiary is in default under or in violation of any such law, statute,
rule or regulation, order, writ, judgment, injunction, decree, determination or
award or any such indenture, loan or credit agreement or other agreement,
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lease or instrument in any case in which the consequences of such default or
violation could have a material adverse effect on the business, operations,
properties, assets or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole.
Section 4.4 Government Consent. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority is required
on the part of the Borrower to authorize, or is required in connection with the
execution, delivery and performance of, or the legality, validity, binding
effect or enforceability of, the Loan Documents, except for any necessary filing
or recordation of or with respect to any of the Security Documents.
Section 4.5 Financial Statements and Condition. The Borrower's
audited consolidated financial statements as at December 31, 1999, as heretofore
furnished to the Bank, have been prepared in accordance with GAAP on a
consistent basis and fairly present the financial condition of the Borrower and
its Subsidiaries as at such dates and the results of their operations and
changes in financial position for the respective periods then ended. As of the
dates of such financial statements, neither the Borrower nor any Subsidiary had
any material obligation, contingent liability, liability for taxes or long-term
lease obligation which is not reflected in such financial statements or in the
notes thereto. Since December 31, 1999, there has been no material adverse
change in the business, operations, property, assets or condition, financial or
otherwise, of the Borrower and its Subsidiaries taken as a whole.
Section 4.6 Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of the Borrower, threatened against or
affecting the Borrower or any Subsidiary or any of their properties before any
court or arbitrator, or any governmental department, board, agency or other
instrumentality which, if determined adversely to the Borrower or such
Subsidiary, would have a material adverse effect on the business, operations,
property or condition (financial or otherwise) of the Borrower and the
Subsidiaries taken as a whole or on the ability of the Borrower or any
Subsidiary to perform its obligations under the Loan Documents.
Section 4.7 Environmental, Health and Safety Laws. There does
not exist any violation by the Borrower or any Subsidiary of any applicable
federal, state or local law, rule or regulation or order of any government,
governmental department, board, agency or other instrumentality relating to
environmental, pollution, health or safety matters which will or threatens to
impose a material liability on the Borrower or a Subsidiary or which would
require a material expenditure by the Borrower or such Subsidiary to cure.
Neither the Borrower nor any Subsidiary has received any notice to the effect
that any part of its operations or properties is not in material compliance with
any such law, rule, regulation or order or notice that it or its property is the
subject of any governmental investigation evaluating whether any remedial action
is needed to respond to any release of any toxic or hazardous waste or substance
into the environment, which noncompliance or remedial action could reasonably be
expected to have a material adverse effect on the business, operations,
properties, assets or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole. The Borrower does not have knowledge that it or
its property or any Subsidiary or
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the property of any Subsidiary will become subject to environmental laws or
regulations during the term of this Agreement, compliance with which could
reasonably be expected to require Capital Expenditures which would have a
material adverse effect on the business, operations, properties, assets or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken as
a whole.
Section 4.8 ERISA. Each Plan is in substantial compliance with
all applicable requirements of ERISA and the Code and with all material
applicable rulings and regulations issued under the provisions of ERISA and the
Code setting forth those requirements. No Reportable Event has occurred and is
continuing with respect to any Plan. All of the minimum funding standards
applicable to such Plans have been satisfied and there exists no event or
condition which would reasonably be expected to result in the institution of
proceedings to terminate any Plan under Section 4042 of ERISA. With respect to
each Plan subject to Title IV of ERISA, as of the most recent valuation date for
such Plan, the present value (determined on the basis of reasonable assumptions
employed by the independent actuary for such Plan and previously furnished in
writing to the Bank) of such Plan's projected benefit obligations did not exceed
the fair market value of such Plan's assets.
Section 4.9 Federal Reserve Regulations. Neither the Borrower
nor any Subsidiary is engaged principally or as one of its important activities
in the business of extending credit for the purpose of purchasing or carrying
margin stock (as defined in Regulation U of the Board). The value of all margin
stock owned by the Borrower does not constitute more than 25% of the value of
the assets of the Borrower.
Section 4.10 Title to Property; Leases; Liens; Subordination.
Each of the Borrower and the Subsidiaries has (a) good and marketable title to
its real properties and (b) good and sufficient title to, or valid, subsisting
and enforceable leasehold interest in, its other material properties, including
all real properties, other properties and assets, referred to as owned by the
Borrower and its Subsidiaries in the most recent financial statement referred to
in Section 4.5 (other than property disposed of since the date of such financial
statements in the ordinary course of business). None of such properties is
subject to a Lien, except as allowed under Section 6.11. The Borrower has not
subordinated any of its rights under any obligation owing to it to the rights of
any other person.
Section 4.11 Taxes. Each of the Borrower and the Subsidiaries
has filed all federal, state and local tax returns required to be filed and has
paid or made provision for the payment of all taxes due and payable pursuant to
such returns and pursuant to any assessments made against it or any of its
property and all other taxes, fees and other charges imposed on it or any of its
property by any governmental authority (other than taxes, fees or charges the
amount or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves in accordance with
GAAP have been provided on the books of the Borrower). No tax Liens have been
filed and no material claims are being asserted with respect to any such taxes,
fees or charges. The charges, accruals and reserves on the books of the Borrower
in respect of taxes and other governmental charges are adequate and the Borrower
knows of no proposed material tax assessment against it or any Subsidiary or any
basis therefor.
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Section 4.12 Trademarks, Patents. Each of the Borrower and the
Subsidiaries possesses or has the right to use all of the patents, trademarks,
trade names, service marks and copyrights, and applications therefor, and all
technology, know-how, processes, methods and designs used in or necessary for
the conduct of its business, without known conflict with the rights of others.
Section 4.13 Burdensome Restrictions. Neither the Borrower nor
any Subsidiary is a party to or otherwise bound by any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
charter, corporate or partnership restriction which would foreseeably have a
material adverse effect on the business, properties, assets, operations or
condition (financial or otherwise) of the Borrower or such Subsidiary or on the
ability of the Borrower or any Subsidiary to carry out its obligations under any
Loan Document.
Section 4.14 Force Majeure. Since the date of the most recent
financial statement referred to in Section 4.5, the business, properties and
other assets of the Borrower and the Subsidiaries have not been materially and
adversely affected in any way as the result of any fire or other casualty,
strike, lockout, or other labor trouble, embargo, sabotage, confiscation,
condemnation, riot, civil disturbance, activity of armed forces or act of God.
Section 4.15 Investment Company Act. Neither the Borrower nor
any Subsidiary is an "investment company" or a company "controlled" by an
investment company within the meaning of the Investment Company Act of 1940, as
amended.
Section 4.16 Public Utility Holding Company Act. Neither the
Borrower nor any Subsidiary is a "holding company" or a "subsidiary company" of
a holding company or an "affiliate" of a holding company or of a subsidiary
company of a holding company within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
Section 4.17 Retirement Benefits. Except as required under
Section 4980B of the Code, Section 601 of ERISA or applicable state law, neither
the Borrower nor any Subsidiary is obligated to provide post-retirement medical
or insurance benefits with respect to employees or former employees.
Section 4.18 Full Disclosure. Subject to the following
sentence, neither the financial statements referred to in Section 4.5 nor any
other certificate, written statement, exhibit or report furnished by or on
behalf of the Borrower in connection with or pursuant to this Agreement contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements contained therein not misleading.
Certificates or statements furnished by or on behalf of the Borrower to the Bank
consisting of projections or forecasts of future results or events have been
prepared in good faith and based on good faith estimates and assumptions of the
management of the Borrower, and the Borrower has no reason to believe that such
projections or forecasts are not reasonable.
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Section 4.19 Subsidiaries. The Borrower has only one
subsidiary, ACIC, of which it owns 100% of the common stock, which stock is the
only class of capital stock issued by ACIC.
Section 4.20 Year 2000. The Borrower has reviewed and assessed
it business operations and computer systems and applications to address the
"year 2000 problem" (that is, that computer applications and equipment used by
the Borrower, directly or indirectly through third parties, may have been or may
be unable to properly perform date-sensitive functions before, during and after
January 1, 2000). The Borrower represents and warrants that the year 2000
problem has not resulted in and will not result in a material adverse change in
the Borrower's business condition (financial or otherwise), operations,
properties or prospects or ability to repay the Bank. The Borrower agrees that
this representation and warranty will be true and correct on and shall be deemed
made by the Borrower on each date the Borrower requests any Loan under this
Agreement or the Notes or delivers any information to the Bank. The Borrower
will promptly deliver to the Bank such information relating to this
representation and warranty as the Bank requests from time to time.
ARTICLE V
AFFIRMATIVE COVENANTS
Until any obligation of the Bank hereunder to make the Loans
shall have expired or been terminated and the Notes and all of the other
Obligations have been paid in full, unless the Bank shall otherwise consent in
writing:
Section 5.1 Financial Statements and Reports. The Borrower
will furnish to the Bank:
5.1(a) As soon as available and in any event within 90 days
after the end of each fiscal year of the Borrower, the consolidated financial
statements of the Borrower and the Subsidiaries consisting of at least
statements of income, cash flow and changes in stockholders' equity, and a
consolidated balance sheet as at the end of such year, setting forth in each
case in comparative form corresponding figures from the previous annual audit,
certified without qualification by an independent certified public accountant of
recognized national standing selected by the Borrower and acceptable to the
Bank, together with any management letters, management reports or other
supplementary comments or reports to the Borrower or its board of directors
furnished by such accountants.
5.1(b) As soon as available and in any event within 45 days
after the end of each fiscal quarter, unaudited consolidated statements of
income, cash flow and changes in stockholders' equity for the Borrower and the
Subsidiaries for such quarter and for the period from the beginning of such
fiscal year to the end of such quarter, and a consolidated balance sheet of the
Borrower as at the end of such quarter, setting forth in comparative form
figures for the corresponding period for the preceding fiscal year, accompanied
by a certificate signed by the chief financial officer of the Borrower stating
that such financial statements present fairly the financial condition of the
Borrower and the Subsidiaries and that the same have been prepared in accordance
with GAAP (except for the absence of footnotes and subject to year-end audit
adjustments as to the interim statements).
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5.1(c) As soon as practicable and in any event within 45 days
after the end of each fiscal quarter, a Compliance Certificate in the form
attached hereto as Exhibit 5.1(c) signed by the chief financial officer,
controller or director of planning and reporting of the Borrower demonstrating
in reasonable detail compliance (or noncompliance, as the case may be) with
Sections 6.13, 6.14, 6.15, 6.16, 6.17, 6.18. 6.19 and 6.20, as at the end of
such quarter and stating that as at the end of such quarter there did not exist
any Default or Event of Default or, if such Default or Event of Default existed,
specifying the nature and period of existence thereof and what action the
Borrower proposes to take with respect thereto.
5.1(d) Immediately upon any officer of the Borrower becoming
aware of any Default or Event of Default, a notice describing the nature thereof
and what action the Borrower proposes to take with respect thereto.
5.1(e) Immediately upon any officer of the Borrower becoming
aware of the occurrence, with respect to any Plan, of any Reportable Event or
any Prohibited Transaction, a notice specifying the nature thereof and what
action the Borrower proposes to take with respect thereto, and, when received,
copies of any notice from PBGC of intention to terminate or have a trustee
appointed for any Plan.
5.1(f) As soon as possible, but in any event within sixty (60)
days after the end of each fiscal year of ACIC, a copy of the Annual Statement
of ACIC for such fiscal year prepared in accordance with SAP and accompanied by
the certification of the responsible officer of ACIC that such financial
statements present fairly, in accordance with SAP, the financial position of
ACIC for the period then ended.
5.1(g) As soon as possible, but in any event within sixty (60)
days after the end of each of the first three fiscal quarters of each fiscal
year of ACIC, a copy of the quarterly statement of ACIC for such fiscal quarter,
all prepared in accordance with SAP and accompanied by the certification of the
responsible officer of ACIC that all such financial statements present fairly in
accordance with SAP the financial position of ACIC for the periods then ended
(subject to normal year-end and audit adjustments);
5.1(h) Within fifteen (15) days after being delivered to ACIC,
any final examination report issued from time to time by the applicable
Insurance Regulatory Authority or the NAIC;
5.1(i) Within ninety (90) days after the close of each fiscal
year of ACIC, a copy of the "Statement of Actuarial Opinion" for ACIC which is
provided to the applicable Insurance Regulatory Authority (or equivalent
information should the Insurance Regulatory Authority no longer require such a
statement). Such statement shall be in the format prescribed by the insurance
code of the State of Minnesota.
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5.1(j) Within ninety (90) days after the close of each fiscal
year of ACIC, a copy of the annual Milliman & Xxxxxxxxx, Inc. actuarial analysis
of the loss and loss adjustment expense reserves of ACIC.
5.1(k) Together with the financial statements furnished by the
Borrower under Sections 5.1(f) and 5.1(g), calculations of the Risk Based
Capital for ACIC based on the quarterly or annual financial statements being
delivered.
5.1(l) Promptly upon the mailing or filing thereof, copies of
all financial statements, reports and proxy statements mailed to the Borrower's
shareholders, and copies of all registration statements, periodic reports and
other documents filed with the Securities and Exchange Commission (or any
successor thereto) or any national securities exchange.
5.1(m) Copies of all material Insurance Holding Company System
Act filings with Governmental Authorities by the Borrower or ACIC not later than
ten (10) Business Days after such filings are made, including, without
limitation, filings which seek approval of Governmental Authorities with respect
to transactions between the Borrower and its Affiliates.
5.1(n) Within five (5) Business Days of such notice, notice of
actual suspension, termination or revocation of any License or restriction
thereon (material to ACIC) of ACIC by the Insurance Regulatory Authority or of
receipt of notice from the Insurance Regulatory Authority notifying ACIC of a
hearing (which is not withdrawn within ten (10) days) relating to such a
suspension, termination, revocation or restriction, including any request by the
Insurance Regulatory Authority which commits ACIC to take, or refrain from
taking, any action or which otherwise materially and adversely affects the
authority of ACIC to conduct its business.
5.1(o) Within three (3) Business Days of such notice, notice
of any pending or threatened investigation or regulatory proceeding (other than
routine periodic investigations or reviews) by any Insurance Regulatory
Authority concerning the business, practices or operations of ACIC including any
agent or managing general agent thereof.
5.1(p) Promptly, upon knowledge of the Borrower or ACIC, to
the Bank, notice of any actual or proposed changes in the Applicable Insurance
Code, if such changes could reasonably be expected to constitute a Material
Adverse Occurrence.
5.1(q) As soon as practicable, give written notice to the Bank
of:
(i) The commencement of any litigation against the
Borrower or any Subsidiary involving claimed damages in excess
of $100,000 or relating to the transactions contemplated by
this Credit Agreement.
(ii) The commencement of any material arbitration or
governmental proceeding or investigation not previously
disclosed to the Bank which has been instituted or, to the
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knowledge of the Borrower, is threatened against the Borrower
or any Subsidiary or any of their respective properties which,
if determined adversely to such party, would constitute a
Material Adverse Occurrence.
(iii) Any adverse development which occurs in any
litigation, arbitration or governmental investigation or
proceeding previously disclosed by Borrower to the Bank and
which would constitute a Material Adverse Occurrence.
(iv) Any settlement or disposition of any litigation,
arbitration or governmental investigation or proceeding
previously disclosed to the Bank pursuant to this Credit
Agreement.
5.1(r) From time to time, such other information regarding the
business, operation and financial condition of the Borrower and the Subsidiaries
as the Bank may reasonably request.
Section 5.2 Corporate Existence. The Borrower will maintain,
and cause each Subsidiary to maintain, its corporate existence in good standing
under the laws of its jurisdiction of incorporation and its qualification to
transact business in each jurisdiction where failure so to qualify would
permanently preclude the Borrower or such Subsidiary from enforcing its rights
with respect to any material asset or would expose the Borrower or such
Subsidiary to any material liability; provided, however, that nothing herein
shall prohibit the merger or liquidation of any Subsidiary allowed under Section
6.1.
Section 5.3 Insurance. The Borrower shall maintain, and shall
cause each Subsidiary to maintain, with financially sound and reputable
insurance companies such insurance as may be required by law and such other
insurance in such amounts and against such hazards as is customary in the case
of reputable firms engaged in the same or similar business and similarly
situated.
Section 5.4 Payment of Taxes and Claims. The Borrower shall
file, and cause each Subsidiary to file, all tax returns and reports which are
required by law to be filed by it and will pay, and cause each Subsidiary to
pay, before they become delinquent all taxes, assessments and governmental
charges and levies imposed upon it or its property and all claims or demands of
any kind (including but not limited to those of suppliers, mechanics, carriers,
warehouses, landlords and other like Persons) which, if unpaid, might result in
the creation of a Lien upon its property; provided that the foregoing items need
not be paid if they are being contested in good faith by appropriate
proceedings, and as long as the Borrower's or such Subsidiary's title to its
property is not materially adversely affected, its use of such property in the
ordinary course of its business is not materially interfered with and adequate
reserves with respect thereto have been set aside on the Borrower's or such
Subsidiary's books in accordance with GAAP.
Section 5.5 Inspection. Subject to Section 8.7, the Borrower
shall permit any Person designated by the Bank to visit and inspect any of the
properties, corporate books and financial records of the Borrower and the
Subsidiaries, to examine and to make copies of the books of accounts and
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other financial records of the Borrower and the Subsidiaries, and to discuss the
affairs, finances and accounts of the Borrower and the Subsidiaries with, and to
be advised as to the same by, its officers at such reasonable times and
intervals as the Bank may designate. So long as no Event of Default exists, the
expenses of the Bank for such visits, inspections and examinations shall be at
the expense of the Bank, but any such visits, inspections and examinations made
while any Event of Default is continuing shall be at the expense of the
Borrower.
Section 5.6 Maintenance of Properties. The Borrower will
maintain, and cause each Subsidiary to maintain its properties used or useful in
the conduct of its business in good condition, repair and working order, and
supplied with all necessary equipment, and make all necessary repairs, renewals,
replacements, betterments and improvements thereto, all as may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times.
Section 5.7 Books and Records. The Borrower will keep, and
will cause each Subsidiary to keep, adequate and proper records and books of
account in which full and correct entries will be made of its dealings, business
and affairs.
Section 5.8 Compliance. The Borrower will comply, and will
cause each Subsidiary to comply, in all material respects with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject; provided, however, that failure so to comply shall not be a
breach of this covenant if such failure does not have, or is not reasonably
expected to have, a materially adverse effect on the properties, business,
prospects or condition (financial or otherwise) of the Borrower or such
Subsidiary and the Borrower or such Subsidiary is acting in good faith and with
reasonable dispatch to cure such noncompliance.
Section 5.9 Notice of Litigation. The Borrower will give
prompt written notice to the Bank of the commencement of any action, suit or
proceeding before any court or arbitrator or any governmental department, board,
agency or other instrumentality affecting the Borrower or any Subsidiary or any
property of the Borrower or a Subsidiary or to which the Borrower or a
Subsidiary is a party in which an adverse determination or result could have a
material adverse effect on the business, operations, property or condition
(financial or otherwise) of the Borrower and the Subsidiaries taken as a whole
or on the ability of the Borrower or any Subsidiary to perform its obligations
under this Agreement and the other Loan Documents, stating the nature and status
of such action, suit or proceeding.
Section 5.10 ERISA. The Borrower will maintain, and cause each
Subsidiary to maintain, each Plan in compliance with all material applicable
requirements of ERISA and of the Code and with all applicable rulings and
regulations issued under the provisions of ERISA and of the Code and will not
and not permit any of the ERISA Affiliates to (a) engage in any transaction in
connection with which the Borrower or any of the ERISA Affiliates would be
subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA
or a tax imposed by Section 4975 of the Code, in either case in an amount
exceeding $100,000, (b) fail to make full payment when due of all amounts which,
under the provisions of any Plan, the Borrower or any ERISA Affiliate is
required to pay as
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contributions thereto, or permit to exist any accumulated funding deficiency (as
such term is defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, with respect to any Plan in an aggregate amount exceeding
$100,000 or (c) fail to make any payments in an aggregate amount exceeding
$100,000 to any Multiemployer Plan that the Borrower or any of the ERISA
Affiliates may be required to make under any agreement relating to such
Multiemployer Plan or any law pertaining thereto.
Section 5.11 Environmental Matters; Reporting. The Borrower
will observe and comply with, and cause each Subsidiary to observe and comply
with, all laws, rules, regulations and orders of any government or government
agency relating to health, safety, pollution, hazardous materials or other
environmental matters to the extent noncompliance could result in a material
liability or otherwise have a material adverse effect on the Borrower and the
Subsidiaries taken as a whole. The Borrower will give the Bank prompt written
notice of any violation as to any environmental matter by the Borrower or any
Subsidiary and of the commencement of any judicial or administrative proceeding
relating to health, safety or environmental matters (a) in which an adverse
determination or result could result in the revocation of or have a material
adverse effect on any operating permits, air emission permits, water discharge
permits, hazardous waste permits or other permits held by the Borrower or any
Subsidiary which are material to the operations of the Borrower or such
Subsidiary, or (b) which will or threatens to impose a material liability on the
Borrower or such Subsidiary to any Person or which will require a material
expenditure by the Borrower or such Subsidiary to cure any alleged problem or
violation.
Section 5.12 Further Assurances. The Borrower shall promptly
correct any defect or error that may be discovered in any Loan Document or in
the execution, acknowledgment or recordation thereof. Promptly upon request by
the Bank, the Borrower also shall do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register, any and all deeds,
conveyances, mortgages, deeds of trust, trust deeds, assignments, estoppel
certificates, financing statements and continuations thereof, notices of
assignment, transfers, certificates, assurances and other instruments as the
Bank may reasonable require from time to time in order: (a) to carry out more
effectively the purposes of the Loan Documents; (b) to perfect and maintain the
validity, effectiveness and priority of any security interests intended to be
created by the Loan Documents including, without limitation, the delivery of a
landlord waiver from any landlord required by the Bank; and (c) to better
assure, convey, grant, assign, transfer, preserve, protect and confirm unto the
Bank the rights granted now or hereafter intended to be granted to the Bank
under any Loan Document or under any other instrument executed in connection
with any Loan Document or that the Borrower may be or become bound to convey,
mortgage or assign to the Bank in order to carry out the intention or facilitate
the performance of the provisions of any Loan Document. The Borrower shall
furnish to the Bank evidence satisfactory to the Bank of every such recording,
filing or registration.
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ARTICLE VI
NEGATIVE COVENANTS
Until any obligation of the Bank hereunder to make the Loans
shall have expired or been terminated and the Notes and all of the other
Obligations have been paid in full, unless the Bank shall otherwise consent in
writing:
Section 6.1 Merger; Acquisitions. The Borrower will not: merge
or consolidate or enter into any analogous reorganization or transaction with
any Person; liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); acquire all or substantially all of the stock or the assets of
another Person; or permit any Subsidiary to do any of the foregoing; provided,
however, any Subsidiary may be merged with or liquidated into the Borrower or
any wholly-owned Subsidiary (if the Borrower or such wholly-owned Subsidiary is
the surviving corporation).
Section 6.2 Disposition of Assets. The Borrower will not, and
will not permit any Subsidiary to, directly or indirectly, sell, assign, lease,
convey, transfer or otherwise dispose of (whether in one transaction or a series
of transactions) any property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except:
6.2(a) dispositions of assets in the ordinary course of
business, including, without limitation, dispositions of Investments held by
ACIC in the ordinary course of its business;
6.2(b) dispositions of used, worn-out or surplus equipment,
all in the ordinary course of business;
6.2(c) the sale of equipment to the extent that such equipment
is exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are applied with reasonable promptness
to the purchase price of such replacement equipment; and
6.2(d) other dispositions of property during the term of this
Agreement whose net book value in the aggregate does not exceed $100,000.
Section 6.3 Plans. The Borrower will not permit, and will not
allow any Subsidiary to permit, any event to occur or condition to exist which
would permit any Plan to terminate under any circumstances which would cause the
Lien provided for in Section 4068 of ERISA to attach to any assets of the
Borrower or any Subsidiary; and the Borrower will not permit, as of the most
recent valuation date for any Plan subject to Title IV of ERISA, the present
value (determined on the basis of reasonable assumptions employed by the
independent actuary for such Plan and previously furnished in writing to the
Bank) of such Plan's projected benefit obligations to exceed the fair market
value of such Plan's assets.
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Section 6.4 Change in Nature of Business. The Borrower will
not, and will not permit any Subsidiary to, make any material change in the
nature of the business of the Borrower or such Subsidiary, as carried on at the
date hereof. For purposes of this Section 6.4, the provision of claims
management, disability management, the provision and sale of software related to
such activities and similar insurance-related activities shall not be deemed to
be a material change in the nature of the business of the Borrower or any
Subsidiary of the Borrower, as carried on at the date hereof.
Section 6.5 Subsidiaries. After the date of this Agreement,
the Borrower will not, and will not permit any Subsidiary to, form or acquire
any corporation which would thereby become a Subsidiary, except that ACIC may
form a wholly owned subsidiary to be known as Bloomington Compensation Insurance
Company to engage in workers' compensation insurance activities in fixed- rate
markets.
Section 6.6 Negative Pledges; Subsidiary Restrictions. The
Borrower will not, and will not permit any Subsidiary to, enter into any
agreement, bond, note or other instrument with or for the benefit of any Person
other than the Bank which would (i) prohibit the Borrower or such Subsidiary
from granting, or otherwise limit the ability of the Borrower or such Subsidiary
to grant, to the Bank any Lien on any assets or properties of the Borrower or
such Subsidiary, or (ii) require the Borrower or such Subsidiary to xxxxx x Xxxx
to any other Person if the Borrower or such Subsidiary grants any Lien to the
Bank. The Borrower will not permit any Subsidiary to place or allow any
restriction, directly or indirectly, on the ability of such Subsidiary to (a)
pay dividends or any distributions on or with respect to such Subsidiary's
capital stock or (b) make loans or other cash payments to the Borrower.
Section 6.7 Restricted Payments. The Borrower will not make
any Restricted Payments, except that the Borrower may redeem stock purchased by
employees pursuant to incentive plans, provided that the aggregate redemption
price paid for such stock shall not exceed $250,000 in any single fiscal year.
Section 6.8 Transactions with Affiliates. The Borrower will
not, and will not permit any Subsidiary to, enter into any transaction with any
Affiliate of the Borrower, except upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate.
Section 6.9 Accounting Changes. The Borrower will not, and
will not permit any Subsidiary to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP, or change its
fiscal year or the fiscal year of any Subsidiary.
Section 6.10 Indebtedness. The Borrower will not, and will not
permit any Subsidiary to, incur, create, issue, assume or suffer to exist any
Indebtedness, except:
6.10(a) the Obligations.
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6.10(b) liabilities, other than for borrowed money, incurred
in the ordinary course of business.
6.10(c) Indebtedness existing on the date of this Agreement
and disclosed on Exhibit 6.10 hereto, but not including any extension or
refinancing thereof.
6.10(d) Indebtedness secured by Liens permitted under Section
6.11 hereof, provided that the aggregate principal amount of such Indebtedness
at any time outstanding shall not exceed $100,000.
6.10(e) other Indebtedness, subject to Section 6.14 hereof.
Section 6.11 Liens. The Borrower will not, and will not permit
any Subsidiary to, create, incur, assume or suffer to exist any Lien, or enter
into, or make any commitment to enter into, any arrangement for the acquisition
of any property through conditional sale, lease-purchase or other title
retention agreements, with respect to any property now owned or hereafter
acquired by the Borrower or a Subsidiary, except:
6.11(a) Liens granted to the Bank under the Security Documents
to secure the Obligations.
6.11(b) Liens existing on the date of this Agreement and
disclosed on Exhibit 6.11 hereto.
6.11(c) Deposits or pledges to secure payment of workers'
compensation, unemployment insurance, old age pensions or other social security
obligations, in the ordinary course of business of the Borrower or a Subsidiary.
6.11(d) Liens for taxes, fees, assessments and governmental
charges not delinquent or to the extent that payment therefor shall not at the
time be required to be made in accordance with the provisions of Section 5.4.
6.11(e) Liens of carriers, warehousemen, mechanics and
materialmen, and other like Liens arising in the ordinary course of business,
for sums not due or to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of Section 5.4.
6.11(f) Liens incurred or deposits or pledges made or given in
connection with, or to secure payment of, indemnity, performance or other
similar bonds.
6.11(g) Encumbrances in the nature of zoning restrictions,
easements and rights or restrictions of record on the use of real property and
landlord's Liens under leases on the premises rented, which do not materially
detract from the value of such property or impair the use thereof in the
business of the Borrower or a Subsidiary.
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6.11(h) The interest of any lessor under any Capitalized Lease
entered into after the Closing Date or purchase money Liens on property acquired
after the Closing Date; provided, that, (i) the Indebtedness secured thereby is
otherwise permitted by this Agreement and (ii) such Liens are limited to the
property acquired and do not secure Indebtedness other than the related
Capitalized Lease Obligations or the purchase price of such property.
Section 6.12 Contingent Liabilities. The Borrower will not,
and will not permit any Subsidiary to, be or become liable on any Contingent
Obligations except (a) Contingent Obligations existing on the date of this
Agreement and described on Exhibit 6.12 and (b) Contingent Obligations arising
from the routine adjudication of claims resulting from workplace injuries in the
ordinary course of the Borrower's workers' compensation management program..
Section 6.13 Fixed Charge Coverage Ratio. The Borrower will
not permit the Fixed Charge Coverage Ratio at any time to be less than 1.75 to
1.00.
Section 6.14 Maximum Indebtedness. The Borrower will not
permit the aggregate principal amount of its Indebtedness at any time
outstanding to exceed $20,000,000; provided, however, that for purposes of this
Section 6.14, Indebtedness shall not include liabilities arising from the
routine adjudication of claims resulting from workplace injuries in the ordinary
course of the Borrower's workers' compensation management program.
Section 6.15 Consolidated Net Worth. The Borrower will not
permit its Consolidated Net Worth at any time to be less than the sum of
$45,000,000 plus 25% of its cumulative positive Consolidated Net Income arising
after December 31, 1999.
Section 6.16 Statutory Surplus of ACIC. The Borrower shall not
permit ACIC's Capital and Surplus at any time to be less than the sum of
$40,000,000 plus 25% of ACIC's cumulative positive Statutory Net Income arising
after December 31, 1999.
Section 6.17 Consolidated Net Income. The Borrower will not
permit its Consolidated Net Income for any period of four consecutive fiscal
quarters to be less than $4,000,000.
Section 6.18 Risk-Based Capital Ratio of ACIC. The Borrower
will not permit the ratio (expressed as a percentage) of the Adjusted Capital to
the Risk-Based Capital of ACIC at any time to be less than 400%.
Section 6.19 A.M. Best Rating of ACIC. The Borrower will not
permit the rating of ACIC by A.M. Best & Company at any time to be less than B+.
Section 6.20 Investments of ACIC. The Borrower will not permit
the ratio (expressed as a percentage) of the Investment Grade Securities owned
by ACIC to the value of its total Investments (calculated at the lower of cost
or market) at any time to be less than 95%.
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Section 6.21 Loan Proceeds. The Borrower will not, and will
not permit any Subsidiary to, use any part of the proceeds of any Loan or
Advances directly or indirectly, and whether immediately, incidentally or
ultimately, (a) to purchase or carry margin stock (as defined in Regulation U of
the Board) or to extend credit to others for the purpose of purchasing or
carrying margin stock or to refund Indebtedness originally incurred for such
purpose or (b) for any purpose which entails a violation of, or which is
inconsistent with, the provisions of Regulations U or X of the Board.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default. The occurrence of any one or
more of the following events shall constitute an Event of Default:
7.1(a) The Borrower shall fail to make when due, whether by
acceleration or otherwise, any payment of principal of or interest on any Note
or any other Obligation required to be made to the Bank pursuant to this
Agreement and such failure shall continue for seven calendar days.
7.1(b) Any representation or warranty made by or on behalf of
the Borrower or any Subsidiary in this Agreement or any other Loan Document or
by or on behalf of the Borrower or any Subsidiary in any certificate, statement,
report or document herewith or hereafter furnished to the Bank pursuant to this
Agreement or any other Loan Document shall prove to have been false or
misleading in any material respect on the date as of which the facts set forth
are stated or certified.
7.1(c) The Borrower shall fail to comply with Sections 5.2 or
5.3 hereof or any Section of Article VI hereof.
7.1(d) The Borrower shall fail to comply with any other
agreement, covenant, condition, provision or term contained in this Agreement
(other than those hereinabove set forth in this Section 7.1) and such failure to
comply shall continue for thirty (30) calendar days after whichever of the
following dates is the earliest: (i) the date the Borrower gives notice of such
failure to the Bank, (ii) the date the Borrower should have given notice of such
failure to the Bank pursuant to Section 5.1, or (iii) the date the Bank gives
notice of such failure to the Borrower.
7.1(e) Any default (however denominated or defined) shall
occur under any Security Document.
7.1(f) The Borrower or any Subsidiary shall become insolvent
or shall generally not pay its debts as they mature or shall apply for, shall
consent to, or shall acquiesce in the appointment of a custodian, trustee or
receiver of the Borrower or such Subsidiary or for a substantial part of the
property thereof or, in the absence of such application, consent or
acquiescence, a custodian, trustee or receiver shall be appointed for the
Borrower or a Subsidiary or for a substantial part of the property
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thereof and shall not be discharged within 60 days, or the Borrower or any
Subsidiary shall make an assignment for the benefit of creditors.
7.1(g) Any bankruptcy, reorganization, debt arrangement or
other proceedings under any bankruptcy or insolvency law shall be instituted by
or against the Borrower or any Subsidiary, and, if instituted against the
Borrower or any Subsidiary, shall have been consented to or acquiesced in by the
Borrower or such Subsidiary, or shall remain undismissed for 60 days, or an
order for relief shall have been entered against the Borrower or such
Subsidiary.
7.1(h) Any dissolution or liquidation proceeding not permitted
by Section 6.1 shall be instituted by or against the Borrower or a Subsidiary,
and, if instituted against the Borrower or any Subsidiary, shall be consented to
or acquiesced in by the Borrower or such Subsidiary or shall remain for 45 days
undismissed.
7.1(i) A judgment or judgments for the payment of money in
excess of the sum of $500,000 in the aggregate shall be rendered against the
Borrower or a Subsidiary and either (i) the judgment creditor executes on such
judgment or (ii) such judgment remains unpaid or undischarged for more than 45
days from the date of entry thereof or such longer period during which execution
of such judgment shall be stayed during an appeal from such judgment.
7.1(j) The maturity of any material Indebtedness of the
Borrower (other than Indebtedness under this Agreement) or a Subsidiary shall be
accelerated, or the Borrower or a Subsidiary shall fail to pay any such material
Indebtedness when due (after the lapse of any applicable grace period) or, in
the case of such Indebtedness payable on demand, when demanded (after the lapse
of any applicable grace period), or any event shall occur or condition shall
exist and shall continue for more than the period of grace, if any, applicable
thereto and shall have the effect of causing, or permitting the holder of any
such Indebtedness or any trustee or other Person acting on behalf of such holder
to cause, such material Indebtedness to become due prior to its stated maturity
or to realize upon any collateral given as security therefor. For purposes of
this Section, Indebtedness of the Borrower or a Subsidiary shall be deemed
"material" if it exceeds $1,000,000 as to any item of Indebtedness or in the
aggregate for all items of Indebtedness with respect to which any of the events
described in this Section 7.1(j) has occurred.
7.1(k) Any execution or attachment shall be issued whereby any
substantial part of the property of the Borrower or any Subsidiary shall be
taken or attempted to be taken and the same shall not have been vacated or
stayed within 60 days after the issuance thereof.
7.1(l) Any Security Document shall, at any time, cease to be
in full force and effect or shall be judicially declared null and void, or the
validity or enforceability thereof shall be contested by the Borrower, or the
Bank shall cease to have a valid and perfected security interest having the
priority contemplated thereunder in all of the collateral described therein,
other than by action or inaction of the Bank if any of the foregoing shall
remain unremedied for ten days or more after receipt of notice thereof by the
Borrower from the Bank.
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7.1(m) The Borrower shall deny in writing that it has any
further liability under any Loan Document.
7.1(n) Any Change of Control shall occur.
Section 7.2 Remedies. If (a) any Event of Default described in
Sections 7.1(f), (g) or (h) shall occur with respect to the Borrower, the
Revolving Commitment and the Term Commitment shall automatically terminate and
the Notes and all other Obligations shall automatically become immediately due
and payable; or (b) any other Event of Default shall occur and be continuing,
then the Bank may take any of the following actions: (i) declare the Revolving
Commitment and the Term Commitment terminated, whereupon the Revolving
Commitment and the Term Commitment shall terminate and (ii) declare the
outstanding unpaid principal balance of the Notes, the accrued and unpaid
interest thereon and all other Obligations to be forthwith due and payable,
whereupon the Notes, all accrued and unpaid interest thereon and all such
Obligations shall immediately become due and payable, in each case without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived, anything in this Agreement or in the Notes to the
contrary notwithstanding. Upon the occurrence of any of the events described in
clause (a) of the preceding sentence, or upon the occurrence of any of the
events described in clause (b) of the preceding sentence the Bank may exercise
all rights and remedies under any of the Loan Documents, and enforce all rights
and remedies under any applicable law.
Section 7.3 Offset. In addition to the remedies set forth in
Section 7.2, upon the occurrence of any Event of Default and thereafter while
the same be continuing, the Borrower hereby irrevocably authorizes the Bank to
set off any Obligations owed to the Bank against all deposits and credits of the
Borrower with, and any and all claims of the Borrower against, the Bank. Such
right shall exist whether or not the Bank shall have made any demand hereunder
or under any other Loan Document, whether or not the Obligations, or any part
thereof, or deposits and credits held for the account of the Borrower is or are
matured or unmeasured, and regardless of the existence or adequacy of any
collateral, guaranty or any other security, right or remedy available to the
Bank. The Bank agrees that, as promptly as is reasonably possible after the
exercise of any such setoff right, it shall notify the Borrower of its exercise
of such setoff right; provided, however, that the failure of the Bank to provide
such notice shall not affect the validity of the exercise of such setoff rights.
Nothing in this Agreement shall be deemed a waiver or prohibition of or
restriction on the Bank to all rights of banker's Lien, setoff and counterclaim
available pursuant to law.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Modifications. Notwithstanding any provisions to
the contrary herein, any term of this Agreement may be amended with the written
consent of the Borrower; provided that no amendment, modification or waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure therefrom by the Borrower or other party thereto shall in any event be
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effective unless the same shall be in writing and signed by the Bank, and then
such amendment, modification, waiver or consent shall be effective only in the
specific instance and for the purpose for which given.
Section 8.2 Expenses. Whether or not the transactions
contemplated hereby are consummated, the Borrower agrees to reimburse the Bank
upon demand for all reasonable out-of-pocket expenses paid or incurred by the
Bank (including filing and recording costs and fees and expenses of Xxxxxx &
Xxxxxxx LLP, counsel to the Bank) in connection with the negotiation,
preparation, approval, review, execution, delivery, administration, amendment,
modification and interpretation of this Agreement and the other Loan Documents
and any commitment letters relating thereto. The Borrower shall also reimburse
the Bank upon demand for all reasonable out-of-pocket expenses (including
expenses of legal counsel) paid or incurred by the Bank in connection with the
collection and enforcement of this Agreement and any other Loan Document. The
obligations of the Borrower under this Section shall survive any termination of
this Agreement.
Section 8.3 Waivers, etc. No failure on the part of the Bank
or the holder of a Note to exercise and no delay in exercising any power or
right hereunder or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any power or right preclude
any other or further exercise thereof or the exercise of any other power or
right. The remedies herein and in the other Loan Documents provided are
cumulative and not exclusive of any remedies provided by law.
Section 8.4 Notices. Except when telephonic notice is
expressly authorized by this Agreement, any notice or other communication to any
party in connection with this Agreement shall be in writing and shall be sent by
manual delivery, telegram, telex, facsimile transmission, overnight courier or
United States mail (postage prepaid) addressed to such party at the address
specified on the signature page hereof, or at such other address as such party
shall have specified to the other party hereto in writing. All periods of notice
shall be measured from the date of delivery thereof if manually delivered, from
the date of sending thereof if sent by telegram, telex or facsimile
transmission, from the first Business Day after the date of sending if sent by
overnight courier, or from three Business Days after the date of mailing if
mailed; provided, however, that any notice to the Bank under Article II hereof
shall be deemed to have been given only when received by the Bank.
Section 8.5 Taxes. The Borrower agrees to pay, and save the
Bank harmless from all liability for, any stamp or other taxes which may be
payable with respect to the execution or delivery of this Agreement or the
issuance of the Notes, which obligation of the Borrower shall survive the
termination of this Agreement.
Section 8.6 Successors and Assigns; Disposition of Loans;
Transferees. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that the
Borrower may not assign its rights or delegate its obligations hereunder or
under any other Loan Document without the prior written consent of the Bank. The
Bank may at any time sell, assign, transfer, grant participations in, or
otherwise dispose of any portion of the
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Revolving Commitment, the Term Commitment, the Loans and/or Advances (each such
interest so disposed of being herein called a "Transferred Interest") to banks
or other financial institutions ("Transferees"), and the Bank shall promptly
provide notice to the Borrower of any such Transferred Interest and the identity
of the Transferee thereof. The Borrower agrees that each Transferee shall be
entitled to the benefits of Sections 2.14, 2.15, 2.16, 2.17, 2.18, 2.19, 2.20
and 8.2 with respect to its Transferred Interest and that each Transferee may
exercise any and all rights of banker's Lien, setoff and counterclaim as if such
Transferee were a direct lender to the Borrower. If the Bank makes any
assignment to a Transferee, then upon notice to the Borrower such Transferee, to
the extent of such assignment (unless otherwise provided therein), shall become
a "Bank" hereunder and shall have all the rights and obligations of the Bank
hereunder to the extent of its Transferred Interest and the Bank shall be
released from its duties and obligations under this Agreement to the extent of
such assignment. Notwithstanding the sale by the Bank of any participation
hereunder, no participant shall be deemed to be or have the rights and
obligations of the Bank hereunder except that any participant shall have a right
of setoff under Section 7.3 as if it were the Bank and the amount of its
participation were owing directly to such participant by the Borrower.
Section 8.7 Confidentiality of Information. The Bank shall use
reasonable efforts to assure that information about the Borrower and its
operations, affairs and financial condition, not generally disclosed to the
public or to trade and other creditors, which is furnished to the Bank pursuant
to the provisions hereof is used only for the purposes of this Agreement and any
other relationship between the Bank and the Borrower (collectively,
"Confidential Borrower Information") and shall not be divulged to any Person
other than the Bank's Affiliates and the respective officers, directors,
employees and agents of the Bank and its Affiliates, except that such persons
may disclose Confidential Borrower Information: (a) to their attorneys and
accountants, (b) in connection with the enforcement of the rights of the Bank
hereunder and under the Notes and the Security Documents or otherwise in
connection with applicable litigation, (c) in connection with assignments and
participations and the solicitation of prospective assignees and participants
referred to in the immediately preceding Section, provided that (i) Transferees
agree to be bound by the restrictions of this Section 8.7 and (ii) the Bank uses
reasonable efforts to assure that prospective assignees and participants do not
generally disclose Confidential Borrower Information to the public, and (d) as
may otherwise be required or requested by any regulatory authority having
jurisdiction over the Bank or by any applicable law, rule, regulation or
judicial process, the opinion of the Bank's counsel concerning the making of
such disclosure to be binding on the parties hereto. The Bank shall not incur
any liability to the Borrower by reason of any disclosure permitted by this
Section 8.7.
Section 8.8 Governing Law and Construction. THE VALIDITY,
CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT
TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE
UNITED STATES APPLICABLE TO NATIONAL BANKS. Whenever possible, each provision of
this Agreement and the other Loan Documents and any other statement, instrument
or transaction contemplated hereby or thereby or relating hereto or thereto
shall be interpreted in such manner as to be effective and valid under such
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applicable law, but, if any provision of this Agreement, the other Loan
Documents or any other statement, instrument or transaction contemplated hereby
or thereby or relating hereto or thereto shall be held to be prohibited or
invalid under such applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement, the other Loan
Documents or any other statement, instrument or transaction contemplated hereby
or thereby or relating hereto or thereto.
Section 8.9 Consent to Jurisdiction. AT THE OPTION OF THE
BANK, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE ENFORCED IN ANY FEDERAL
COURT OR MINNESOTA STATE COURT SITTING IN HENNEPIN COUNTY OR XXXXXX COUNTY; AND
THE BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES
ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE
BORROWER COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR
CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY
THIS AGREEMENT, THE BANK AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE
TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH
TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE
DISMISSED WITHOUT PREJUDICE.
Section 8.10 Waiver of Jury Trial. EACH OF THE BORROWER AND
THE BANK IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 8.11 Survival of Agreement. All representations,
warranties, covenants and agreement made by the Borrower herein or in the other
Loan Documents and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be deemed to have been relied upon by the Bank and shall survive
the making of the Loans by the Bank and the execution and delivery to the Bank
by the Borrower of the Notes, regardless of any investigation made by or on
behalf of the Bank, and shall continue in full force and effect as long as any
Obligation is outstanding and unpaid and so long as the Revolving Commitment has
not been terminated; provided, however, that the obligations of the Borrower
under Section 8.2, 8.5 and 8.12 shall survive payment in full of the Obligations
and the termination of the Revolving Commitment.
Section 8.12 Indemnification. The Borrower hereby agrees to
defend, protect, indemnify and hold harmless the Bank and its Affiliates and the
directors, officers, employees, attorneys and agents of the Bank and its
Affiliates (each of the foregoing being an "Indemnitee" and all of the foregoing
being collectively the "Indemnitees") from and against any and all claims,
actions, damages, liabilities, judgments, costs and expenses (including all
reasonable fees and disbursements of counsel
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which may be incurred in the investigation or defense of any matter) imposed
upon, incurred by or asserted against any Indemnitee, whether direct, indirect
or consequential and whether based on any federal, state, local or foreign laws
or regulations (including securities laws, environmental laws, commercial laws
and regulations), under common law or on equitable cause, or on contract or
otherwise:
(a) by reason of, relating to or in connection with
the execution, delivery, performance or enforcement of any Loan
Document, any commitments relating thereto, or any transaction
contemplated by any Loan Document; or
(b) by reason of, relating to or in connection with
any credit extended or used under the Loan Documents or any act done or
omitted by any Person, or the exercise of any rights or remedies
thereunder, including the acquisition of any collateral by the Bank by
way of foreclosure of the Lien thereon, deed or xxxx of sale in lieu of
such foreclosure or otherwise;
provided, however, that the Borrower shall not be liable to any Indemnitee for
any portion of such claims, damages, liabilities and expenses resulting from
such Indemnitee's gross negligence or willful misconduct. In the event this
indemnity is unenforceable as a matter of law as to a particular matter or
consequence referred to herein, it shall be enforceable to the full extent
permitted by law.
This indemnification applies, without limitation, to any act,
omission, event or circumstance existing or occurring on or prior to the latest
of the Revolving Maturity Date, the Term Maturity Date or the date of payment in
full of the Obligations, including specifically Obligations arising under clause
(b) of this Section. The indemnification provisions set forth above shall be in
addition to any liability the Borrower may otherwise have. Without prejudice to
the survival of any other obligation of the Borrower hereunder the indemnities
and obligations of the Borrower contained in this Section shall survive the
payment in full of the other Obligations.
Section 8.13 Captions. The captions or headings herein and any
table of contents hereto are for convenience only and in no way define, limit or
describe the scope or intent of any provision of this Agreement.
Section 8.14 Entire Agreement. This Agreement and the other
Loan Documents embody the entire agreement and understanding between the
Borrower and the Bank with respect to the subject matter hereof and thereof.
This Agreement supersedes all prior agreements and understandings relating to
the subject matter hereof. Nothing contained in this Agreement or in any other
Loan Document, expressed or implied, is intended to confer upon any Persons
other than the parties hereto any rights, remedies, obligations or liabilities
hereunder or thereunder.
Section 8.15 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
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Section 8.16 Borrower Acknowledgments. The Borrower hereby
acknowledges that (a) the Bank has no fiduciary relationship to the Borrower,
the relationship being solely that of debtor and creditor, (b) no joint venture
exists between the Borrower and the Bank, and (c) the Bank undertakes no
responsibility to the Borrower to review or inform the Borrower of any matter in
connection with any phase of the business or operations of the Borrower and the
Borrower shall rely entirely upon its own judgment with respect to its business,
and any review, inspection or supervision of, or information supplied to, the
Borrower by the Bank is for the protection of the Bank and neither the Borrower
nor any third party is entitled to rely thereon.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
-44-
45
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
RTW, INC.
By /s/ X X XXXXXX
------------------------------------
Title Chief Financial Officer
---------------------------------
Address for Borrower:
0000 Xxxxxxxxxx Xxxx Xxxx., Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
U.S. BANK NATIONAL ASSOCIATION
By /s/ XXXXX X. XXXXXX
------------------------------------
Title Corporate Banking Officer
---------------------------------
Address:
U.S. Bank Place
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
45
46
REVOLVING NOTE
$2,000,000 March 31, 0000
Xxxxxxxxxxx, Xxxxxxxxx
FOR VALUE RECEIVED, RTW, INC., a Minnesota corporation (the
"Borrower"), hereby promises to pay to the order U.S. BANK NATIONAL ASSOCIATION
(the "Bank") at its main office in Minneapolis, Minnesota, in lawful money of
the United States of America in Immediately Available Funds (as such term and
each other capitalized term used herein are defined in the Credit Agreement
hereinafter referred to) on the Revolving Maturity Date, the principal amount of
TWO MILLION AND NO/100THS DOLLARS ($2,000,000) or, if less, the aggregate unpaid
principal amount of the Revolving Loans made by the Bank under the Credit
Agreement, and to pay interest (computed on the basis of actual days elapsed and
a year of 360 days) in like funds on the unpaid principal amount hereof from
time to time outstanding at the rates and times set forth in the Credit
Agreement.
This note is the Revolving Note referred to in the Credit
Agreement dated as of March 31, 2000 (as the same may hereafter be from time to
time amended, restated or otherwise modified, the "Credit Agreement") between
the Borrower and the Bank. This note is secured, it is subject to certain
permissive prepayments and its maturity is subject to acceleration, in each case
upon the terms provided in the Credit Agreement.
In the event of default hereunder, the Borrower agrees to pay
all costs and expenses of collection, including reasonable attorneys' fees. The
Borrower waives demand, presentment, notice of nonpayment, protest, notice of
protest and notice of dishonor.
THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE
SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL
LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS.
RTW, INC.
By /s/ X X XXXXXX
------------------------------------
Title Chief Financial Officer
---------------------------------
47
TERM NOTE
$8,000,000 March 31, 0000
Xxxxxxxxxxx, Xxxxxxxxx
FOR VALUE RECEIVED, RTW, INC., a corporation organized under
the laws of the State of Minnesota, hereby promises to pay to the order of U.S.
BANK NATIONAL ASSOCIATION (the "Bank") at its main office in Minneapolis,
Minnesota, in lawful money of the United States of America in Immediately
Available Funds (as such term and each other capitalized term used herein are
defined in the Credit Agreement hereinafter referred to) on the Term Maturity
Date, the principal amount of EIGHT MILLION AND NO/100THS DOLLARS ($8,000,000),
and to pay interest (computed on the basis of actual days elapsed and a year of
360 days) in like funds on the unpaid principal amount hereof from time to time
outstanding at the rates and times set forth in the Credit Agreement.
The principal of this note shall be payable in installments in
the following amounts on the following dates:
DATE INSTALLMENT
------------------ -----------------------------
December 31, 2000 $1,000,000
------------------ -----------------------------
December 31, 2001 $1,500,000
------------------ -----------------------------
December 31, 2002 $1,500,000
------------------ -----------------------------
December 31, 2003 $2,000,000
------------------ -----------------------------
December 31, 2004 $2,000,000
------------------ -----------------------------
All remaining principal, plus
Term Maturity Date accrued and unpaid interest
------------------ -----------------------------
This note is the Term Note referred to in the Credit Agreement
dated as of March 31, 2000 (as the same may hereafter be from time to time
amended, restated or otherwise modified, the "Credit Agreement") between the
undersigned and the Bank. This note is secured and its maturity is subject to
acceleration, in each case upon the terms provided in said Credit Agreement.
In the event of default hereunder, the undersigned agrees to
pay all costs and expenses of collection, including reasonable attorneys' fees.
The undersigned waives demand, presentment, notice of nonpayment, protest,
notice of protest and notice of dishonor.
48
THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE
SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL
LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS.
RTW, INC.
By /s/ X X XXXXXX
------------------------------------
Title Chief Financial Officer
---------------------------------
-2-
49
EXHIBIT 3.1(a)(ix) TO
TO CREDIT AGREEMENT
MATTERS TO BE COVERED BY
OPINION OF COUNSEL
TO THE BORROWER
The opinion of counsel to the Borrower which is called for by Article
III of the Credit Agreement dated as of March __, 2000 (the "Credit Agreement")
shall be addressed to the Bank and dated the date of the Credit Agreement. It
shall be satisfactory in form and substance to the Bank and shall cover the
matters set forth below, subject to such assumptions, exceptions and
qualifications as may be acceptable to the Bank and counsel to the Bank.
Capitalized terms used herein have the respective meanings given such terms in
the Credit Agreement and the Loan Documents.
(i) The Borrower is a corporation duly incorporated and validly
existing and in good standing under the laws of the State of Minnesota and has
all requisite corporate power and authority to carry on its business as now
conducted, to enter into the Loan Documents and to perform all of its
obligations under the Loan documents. The Borrower is duly qualified and in good
standing as a foreign corporation in all of the jurisdictions in which the
character of the properties owned or leased by it or the business conducted by
it makes such qualification necessary and the failure to so qualify would
permanently preclude the Borrower from enforcing its rights with respect to any
material asset or expose the Borrower to any material liability.
(ii) The execution, delivery and performance by the Borrower of the
Loan Documents has been duly authorized by all necessary corporate action by the
Borrower.
(iii) The Loan Documents constitute the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their respective terms.
(iv) The execution and delivery of the Loan Documents and the
performance by the Borrower of the Loan Documents will not (i) violate any
provision of any law, statute, rule or regulation or, to the best knowledge of
such counsel, any order, writ, judgment, injunction, decree, determination or
award of any court, governmental agency or arbitrator presently in effect having
applicability to the Borrower, (ii) violate or contravene any provision of the
Articles of Incorporation or bylaws of the Borrower, or (iii) result in a breach
of or constitute a default under any indenture, loan or credit agreement or any
other agreement, lease or instrument to which the Borrower is a party or by
which it or any of its properties may be bound or result in the creation of any
Lien thereunder.
(v) No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with, or exemption by, any governmental
or public body or authority is required on the part of the Borrower to
authorize, or is required in connection with the execution, delivery and
performance of, or the legality, validity, binding effect or enforceability of,
the Loan Documents.
50
(vi) To the best knowledge of such counsel, there are no actions, suits
or proceedings pending or threatened against or affecting the Borrower or any of
its properties before any court or arbitrator, or any governmental department,
board, agency or other instrumentality which (i) challenge the legality,
validity or enforceability of the Loan Documents, or (ii) if determined
adversely to the Borrower, would have a material adverse effect on the business,
operations, property or condition (financial or otherwise) of the Borrower and
the Subsidiaries as a consolidated enterprise or on the ability of the Borrower
to perform its obligations under the Loan Documents.
(vii) The Pledge Agreement creates the Lien it purports to create upon
the properties and interests specifically described therein. The descriptions of
properties and interests in the Pledge Agreement and any related financing
statements are adequate for the purpose of such instruments and for perfection
of the Liens of the Bank.
51
EXHIBIT 5.1(c) TO
THE CREDIT AGREEMENT
COMPLIANCE CERTIFICATE
To: U.S. Bank National Association, as Agent and as a Bank
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am the duly elected chief financial officer of RTW, Inc.
(the "Borrower");
(2) I have reviewed the terms of the Credit Agreement dated as
of March __, 2000 by and between the Borrower and U.S. Bank National Association
(the "Credit Agreement"), and I have made, or have caused to be made under my
supervision, a detailed review of the transactions and conditions of the
Borrower during the accounting period covered by the Attachment hereto;
(3) The examination described in paragraph (2) did not
disclose, and I have no knowledge, whether arising out of such examinations or
otherwise, of the existence of any condition or event which constitutes a
Default or an Event of Default (as such terms are defined in the Credit
Agreement) during or at the end of the accounting period covered by the
Attachment hereto or as of the date of this Certificate, except as described
below (or on a separate attachment to this Certificate). The following
exceptions set forth, in detail, the nature of the condition or event, the
period during which it has existed and the action which the Borrower has taken,
is taking or proposes to take with respect to each such condition or event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The foregoing certification, together with the computations in
the Attachment hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ___ day of
___________,___, pursuant to Section 5.1(d) of the Credit Agreement.
RTW, INC.
By
--------------------------------------
Name
------------------------------------
Title
-----------------------------------
52
RTW, INC.
COVENANT COMPLIANCE AS OF [DATE]
[ ] Borrower is in compliance with all covenants
[ ] Borrower is not in compliance with the following covenant(s): ______________
SECTION 6.13: FIXED CHARGE COVERAGE RATIO
Minimum Ratio: 1.75 to 1.00
Actual:
(a) Amount Available for Dividends (rolling four-quarter) $
------------
(b) plus operating gain/(loss) of the Borrower (non-consolidated)
------------
(c) plus tax benefit of interest expense of the Borrower
------------
(d) = (a) + (b) + (c) Coverage
------------
(e) Interest expense of the Borrower (non-consolidated)
------------
(f) plus one-fifth (1/5) of the aggregate principal amount of
Indebtedness of the Borrower
------------
(g) = (e) + (f) Fixed charges
------------
(d) / (g) Actual Fixed Charge Coverage Ratio to 1.00
----
SECTION 6.14: MAXIMUM INDEBTEDNESS
Maximum aggregate principal amount of Borrower's Indebtedness $ 20,000,000
Actual aggregate principal amount of Borrower's Indebtedness $
------------
53
RTW, Inc.
Covenant Compliance as of _____
Page 2
SECTION 6.15: CONSOLIDATED NET WORTH
Required:
(a) Consolidated Net Worth $ 45,000,000
(b) Cumulative positive Consolidated Net Income arising
after December 31, 1999
--------------
x 25%
(c) plus 25% of cumulative positive Consolidated Net Income
arising after December 31, 1999
--------------
(d) = (a) + (c) Minimum Consolidated Net Worth $
--------------
Actual:
(e) Consolidated total assets
--------------
(f) less consolidated total liabilities
--------------
(g) = (e) - (f) Actual Consolidated Net Worth $
--------------
SECTION 6.16: STATUTORY SURPLUS OF ACIC
Required:
(a) Capital and Surplus $ 40,000,000
(b) Cumulative positive Statutory Net Income arising after December 31, 1999
--------------
x 25%
(c) plus 25% of cumulative positive Statutory Net Income arising
after December 31, 1999
--------------
(d) = (a) + (c) Minimum Statutory Surplus of ACIC $
--------------
Actual:
(e) Actual Capital and Surplus of ACIC $
--------------
54
RTW, Inc.
Covenant Compliance as of ______
Page 3
SECTION 6.17: CONSOLIDATED NET INCOME
Minimum Consolidated Net Income (rolling four-quarter) $ 4,000,000
Actual Consolidated Net Income (rolling four-quarter) $
--------------
SECTION 6.18: RISK-BASED CAPITAL RATIO OF ACIC
Minimum Ratio (expressed as a percentage): 400%
Actual:
(a) Adjusted Capital of ACIC $
--------------
(b) Company Action Level of ACIC
--------------
(c) = (a) / (b) Actual Risk-Based Capital Ratio %
----
SECTION 6.19: A.M. BEST RATING OF ACIC
Required:
Maintain a rating of "B+" or better by A.M. Best & Company.
Actual:
A.M. Best & Company rating
--------------
SECTION 6.20: INVESTMENTS OF ACIC
Required:
Minimum ratio of Investment Grade Securities owned by ACIC to the value
of its total Investments (calculated at the lower of cost
or market), expressed as a percentage 95%
Actual:
(a) Investment Grade Securities owned by ACIC $
--------------
(b) Total Investments owned by ACIC
--------------
(c) = (a) / (b) Actual ratio %
----
55
EXHIBIT 6.10
TO CREDIT AGREEMENT
Indebtedness
None
56
EXHIBIT 6.11
TO CREDIT AGREEMENT
Liens
None
57
EXHIBIT 6.12
TO CREDIT AGREEMENT
Contingent Liabilities
None except those that exist as a
normal course of settling
claims in our Workers' Comp. Subsidiary.
