CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of October 30, 1998, is by and between
MARTEN TRANSPORT, LTD., a Delaware corporation (the "Borrower"), the banks
which are signatories hereto (individually, a "Bank" and, collectively, the
"Banks") and U.S. BANK NATIONAL ASSOCIATION, a national banking association,
one of the Banks, as agent for the Banks (in such capacity, the "Agent").
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):
"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.
"ADMINISTRATIVE FEE": As defined in Section 2.16.
"ADVANCE": Any portion of the outstanding Revolving Loans by a
Bank 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 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
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"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.
"AGENT": As defined in the opening paragraph hereof.
"AGGREGATE REVOLVING COMMITMENT AMOUNTS": As of any date, the
sum of the Revolving Commitment Amounts of all the Banks.
"APPLICABLE LENDING OFFICE": For each Bank and for each type
of Advance, the office of such Bank identified as such Bank's Applicable
Lending Office on the signature pages hereof or such other domestic or
foreign office of such Bank (or of an Affiliate of such Bank) as such
Bank may specify from time to time, by notice given pursuant to Section
9.4, to the Agent and the Borrower as the office by which its Advances
of such type are to be made and maintained.
"APPLICABLE MARGIN": With respect to Eurodollar Rate Advances,
the rate per annum corresponding with the Cash Flow Leverage Ratio as of
the last day of the preceding fiscal quarter:
Cash Flow Leverage Ratio Applicable Margin
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GREATER THAN 3.00 1.250%
GREATER THAN 2.25 and LESS THAN OR EQUAL TO 3.00 1.000%
GREATER THAN 1.75 and LESS THAN OR EQUAL TO 2.25 0.750%
GREATER THAN 1.00 and LESS THAN OR EQUAL TO 1.75 0.625%
LESS THAN OR EQUAL TO 1.00 0.500%
"ARRANGEMENT FEE": As defined in Section 3.1(e).
"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.
"BORROWER LOAN DOCUMENTS": This Agreement and the Revolving
Notes.
"BORROWING BASE": As determined in accordance with the formula
set forth in EXHIBIT 1.1B hereto.
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"BORROWING BASE CERTIFICATE": A certificate in the form of
EXHIBIT 1.1C hereto.
"BORROWING BASE DEFICIENCY": At the time of any determination,
the amount, if any, by which Total Revolving Outstandings exceed the
Borrowing Base.
"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 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 and
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).
"CASH FLOW LEVERAGE RATIO": For any period of determination,
the ratio of
(a) the sum (without duplication) of (i) the
aggregate principal amount of all outstanding Capitalized Lease
Obligations
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of the Borrower and the Subsidiaries, (ii) that portion of
Total Liabilities bearing interest determined as of the last
day of that period, (iii) the stated amount of all Letters of
Credit as of the last day of that period, plus (iv) an amount
equal to seven times transportation equipment operating lease
expense for such period,
to
(b) EBITDAR determined for said period on a
consolidated basis in accordance with GAAP.
"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 10% or more of the combined voting power of all
securities of the Borrower entitled to vote in the election of
directors, and such percentage of voting power is equal to or greater
than the aggregate direct and indirect percentage of voting power held
by the Xxxxx Xxxxxx estate or heirs, 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), or (c) a
"Change in Control Event" (as defined in the Senior Unsecured Note
Documents occurs.
"CLOSING DATE": Any Business Day between the date of this
Agreement and November 30, 1998 selected by the Borrower for the making
of the first Revolving Loans hereunder; provided, that all the
conditions precedent to the obligation of the Banks to make such Loans,
as set forth in Article III, have been, or, on such Closing Date, will
be, satisfied. The Borrower shall give the Agent not less than three
Business Days prior notice of the day selected as the Closing Date.
"CODE": The Internal Revenue Code of 1986, as amended.
"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
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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. The amount of any such Contingent Obligation shall
be determined in accordance with GAAP.
"CURRENT LIABILITIES": As of any date, the consolidated
current liabilities of the Borrower, determined in accordance with GAAP.
"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.
"EBITDA": For any period of determination, the consolidated
net income of the Borrower (excluding non-operating gains or losses and
noncash charges), before deductions for income taxes, Interest Expense,
depreciation and amortization, all as determined in accordance with GAAP.
"EBITDAR": For any period of determination, EBITDA plus
transportation equipment operating lease expense during such period.
"EBITR": For any period of determination, the consolidated net
income of the Borrower (excluding non-operating gains or losses and
noncash charges) before deductions for income tax and Interest Expense,
plus transportation equipment operating lease expense during such period.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
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"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 Agent at such time based on
such other published service of general application as shall be selected
by the Agent for such purpose; provided, that in lieu of determining the
rate in the foregoing manner, the Agent may determine the rate based on
rates at which United States dollar deposits are offered to the Agent 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 Agent 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 Agent, in respect of "Eurocurrency Liabilities" as
such term is defined in Regulation D of the Board. The rate of interest
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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.
"EXISTING U.S. BANK DEBT": Indebtedness of the Borrower owed
to U.S. Bank as of the date of this Agreement and described on
SCHEDULE 6.13, in the approximate aggregate outstanding amount of $8.5
million.
"FEE LETTER": The letter between U.S. Bank and the Borrower
dated the Closing Date.
"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.
"HOLDING ACCOUNT": A deposit account belonging to the Agent
for the benefit of the Banks into which the Borrower may be required to
make deposits pursuant to the provisions of this Agreement, such account
to be under the sole dominion and control of the Agent and not subject
to withdrawal by the Borrower, with any amounts therein to be held for
application toward payment of any outstanding Letters of Credit when
drawn upon. The Holding Account shall be a money market savings account
or substantial equivalent (or other appropriate investment medium as the
Borrower may from time to time request and to which the Agent in its
sole discretion shall have consented) and shall bear interest in
accordance with the terms of similar accounts held by the Agent for its
customers.
"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
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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.
"INTEREST COVERAGE RATIO": For any period of determination,
the ratio of (a) EBITR, to (b) Interest Expense plus transportation
equipment operating lease expense, in each case determined for said
period in accordance with GAAP.
"INTEREST EXPENSE": For any period of determination, the
aggregate consolidated amount, without duplication, of interest paid,
accrued or scheduled to be paid in respect of any Indebtedness of the
Borrower, including (a) all but the principal component of payments in
respect of conditional sale contracts, Capitalized Leases and other
title retention agreements, (b) commissions, discounts and other fees
and charges with respect to letters of credit and bankers' acceptance
financings and (c) net costs under interest rate protection agreements,
in each case determined in accordance with GAAP.
"INTEREST PERIOD": 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:
(a) 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;
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(b) 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; and
(c) Any Interest Period that would otherwise end
after the Revolving Commitment Ending Date shall end on the
Revolving Commitment Ending 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 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.
The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"LETTER OF CREDIT": An irrevocable letter of credit issued by
the Agent pursuant to this Agreement for the account of the Borrower.
"LETTER OF CREDIT FEE": As defined in Section 2.16.
"LETTER OF CREDIT SUBLIMIT": $4,000,000.
"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 DOCUMENTS": This Agreement, the Revolving Notes and the
Guaranties.
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"MAJORITY BANKS": At any time, Banks holding at least 66 2/3%
of the aggregate unpaid principal amount of the Revolving Notes or, if
no Revolving Loans are at the time outstanding hereunder, Banks holding
at least 66 2/3% of the Aggregate Revolving Commitment Amounts.
"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.
"NOTE PURCHASE AGREEMENT": The Note Purchase and Private
Shelf Agreement dated October 30, 1998, for $25,000,000 6.78% Series A
Senior Notes due October 30, 2008 and $15,000,000 Private Shelf
Facility, between the Borrower and The Prudential Insurance Company of
America and each Prudential Affiliate (as defined therein) which becomes
a Purchaser (as defined therein) thereunder.
"OBLIGATIONS": The Borrower's obligations, without
duplication, in respect of the due and punctual payment of principal and
interest on the Revolving Notes and Unpaid Drawings when and as due,
whether by acceleration or otherwise and all fees (including Revolving
Commitment Fees), expenses, indemnities, reimbursements and other
obligations of the Borrower under this Agreement or any other Borrower
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.
"PROHIBITED TRANSACTION": The respective meanings assigned to
such term in Section 4975 of the Code and Section 406 of ERISA.
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"REFERENCE RATE": The rate of interest from time to time
publicly announced by the Agent as its "reference rate." The Agent 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 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 any Bank under any federal, state or
foreign laws or 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": With respect to a Bank, the agreement
of such Bank to make Revolving Loans to the Borrower in an aggregate
principal amount outstanding at any time not to exceed such Bank's
Revolving Commitment Amount upon the terms and subject to the conditions
and limitations of this Agreement.
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"REVOLVING COMMITMENT AMOUNT": With respect to a Bank,
initially the amount set opposite such Bank's name on the signature page
hereof as its Revolving Commitment Amount, but as the same may be
reduced from time to time pursuant to Section 2.13.
"REVOLVING COMMITMENT ENDING DATE": As defined in Section 2.19.
"REVOLVING COMMITMENT FEES": As defined in Section 2.15.
"REVOLVING LOAN": As defined in Section 2.1.
"REVOLVING LOAN DATE": The date of the making of any Revolving
Loans hereunder.
"REVOLVING NOTE": A promissory note of the Borrower in the
form of EXHIBIT 1.1A hereto.
"REVOLVING PERCENTAGE": With respect to any Bank, the
percentage equivalent of a fraction, the numerator of which is the
Revolving Commitment Amount of such Bank and the denominator of which is
the Aggregate Revolving Commitment Amounts.
"SENIOR UNSECURED NOTE DOCUMENTS": Collectively, (i) the Note
Purchase Agreement; (ii) the Series A Notes (as defined in the Note
Purchase Agreement) issued under the Note Purchase Agreement; and (iii)
any Shelf Notes (as defined in the Note Purchase Agreement) issued
under the Note Purchase Agreement.
"SUBORDINATED DEBT": Any Indebtedness of the Borrower, now
existing or hereafter created, incurred or arising, which is
subordinated in right of payment to the payment of the Obligations in a
manner and to an extent (a) that Majority Banks have approved in writing
prior to the creation of such Indebtedness, or (b) as to any
Indebtedness of the Borrower existing on the date of this Agreement,
that Majority Banks have approved as Subordinated Debt in a writing
delivered by Majority Banks to the Borrower on or prior to the Closing
Date.
"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.
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"TANGIBLE NET WORTH ": As of any date of determination, the
sum of the amounts set forth on the consolidated balance sheet of the
Borrower as the sum of the common stock, preferred stock, additional
paid-in capital and retained earnings of the Borrower (excluding
treasury stock), less the book value of all intangible assets of the
Borrower and its Subsidiaries, including all such items as goodwill,
trademarks, trade names, service marks, copyrights, patents, licenses,
unamortized debt discount and expenses and the excess of the purchase
price of the assets of any business acquired by the Borrower or any of
its Subsidiaries over the book value of such assets.
"TERMINATION DATE": The earliest of (a) the Revolving
Commitment Ending Date, (b) the date on which the Revolving Commitments
are terminated pursuant to Section 7.2 hereof or (c) the date on which
the Revolving Commitment Amounts are reduced to zero pursuant to
Section 2.13 hereof.
"TOTAL LIABILITIES": At the time of any determination, the
amount, on a consolidated basis, of all items of Indebtedness of the
Borrower and its Subsidiaries that would constitute "liabilities" for
balance sheet purposes in accordance with GAAP.
"TOTAL REVOLVING OUTSTANDINGS": As of any date of
determination, the sum of (a) the aggregate unpaid principal balance of
Revolving Loans outstanding on such date, (b) the aggregate maximum
amount available to be drawn under Letters of Credit outstanding on such
date and (c) the aggregate amount of Unpaid Drawings on such date.
"UNPAID DRAWING": As defined in Section 2.11.
"UNUSED REVOLVING COMMITMENT": With respect to any Bank as of
any date of determination, the amount by which such Bank's Revolving
Commitment Amount exceeds such Bank's Revolving Percentage of the Total
Revolving Outstandings on such date.
"U.S. BANK": U.S. Bank National Association in its capacity as
one of the Banks hereunder.
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,
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such computation or determination shall be made to account for such change in
GAAP.
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
PART A -- TERMS OF LENDING
Section 2.1 THE REVOLVING COMMITMENTS. On the terms and subject to
the conditions hereof, each Bank severally 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 Termination Date, during which period the Borrower may borrow, repay and
reborrow in accordance with the provisions hereof, provided, that no
Revolving Loan will be made in any amount which, after giving effect thereto,
would cause the Total Revolving Outstandings to exceed the lesser of (i) the
Aggregate Revolving Commitment Amounts, or (ii) the Borrowing Base.
Revolving Loans hereunder shall be made by the several Banks ratably in the
proportion of their respective Revolving Commitment Amounts. Revolving Loans
may be obtained and maintained, at the election of the Borrower but subject
to the limitations hereof, as Reference Rate Advances or Eurodollar Rate
Advances or any combination thereof. Notwithstanding any provision hereof,
this Agreement and the Revolving Commitments shall terminate and the Banks
shall have no obligation hereunder if the initial Revolving Loans hereunder
have not been made by November 30, 1998, provided, however, that the
obligations of the Borrower under Section 9.2 shall survive any such
termination.
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Section 2.2 PROCEDURE FOR REVOLVING LOANS. Any request by the
Borrower for Revolving Loans hereunder shall be in writing or by telephone
and must be given so as to be received by the Agent not later than 12:00 noon
(Minneapolis time) two Eurodollar Business Days prior to the requested
Revolving Loan Date if the Revolving Loans (or any portion thereof) are
requested as Eurodollar Rate Advances and not later than 1:00p.m.
(Minneapolis time) on the requested Revolving Loan Date if the Revolving
Loans are requested as Reference Rate Advances. Each request for Revolving
Loans 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 Loans the applicable conditions specified
in Article III have been and will be satisfied. Each request for Revolving
Loans hereunder shall specify (i) the requested Revolving Loan Date, (ii) the
aggregate amount of Revolving Loans to be made on such date which shall be in
a minimum amount of $100,000 or, if more, an integral multiple thereof, (iii)
whether such Revolving Loans are to be funded as Reference Rate Advances or
Eurodollar Rate Advances (and, if such Revolving Loans are 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 Eurodollar
Rate Advances, the duration of the initial Interest Period applicable
thereto. The Agent may rely on any telephone request for Revolving Loans
hereunder which it believes in good faith to be genuine; and the Borrower
hereby waives the right to dispute the Agent's record of the terms of such
telephone request. The Agent shall promptly notify each other Bank of the
receipt of such request, the matters specified therein, and of such Bank's
ratable share of the requested Revolving Loans. On the date of the requested
Revolving Loans, each Bank shall provide its share of the requested Revolving
Loans to the Agent in Immediately Available Funds not later than 2:00 p.m.,
Minneapolis time. Unless the Agent determines that any applicable condition
specified in Article III has not been satisfied, the Agent will make
available to the Borrower at the Agent's principal office in Minneapolis,
Minnesota in Immediately Available Funds not later than 2:00p.m. (Minneapolis
time) on the requested Revolving Loan Date the amount of the requested
Revolving Loans. If the Agent has made a Revolving Loan to the Borrower on
behalf of a Bank but has not received the amount of such Revolving Loan from
such Bank by the time herein required, such Bank shall pay interest to the
Agent on the amount so advanced at the overnight Federal Funds rate from the
date of such Revolving Loan to the date funds are received by the Agent from
such Bank, such interest to be payable with such remittance from such Bank of
the principal amount of such Revolving Loan (provided, however, that the
Agent shall not make any Revolving Loan on behalf of a Bank if the Agent has
received prior notice from such Bank that it will not make such Revolving
Loan). If the Agent does not receive payment from such Bank by the next
Business Day after the date of any Revolving Loan, the Agent shall be
entitled
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to recover such Revolving Loan, with interest thereon at the rate (or rates)
then applicable to the such Revolving Loan (but not including any funding
losses with respect to such Revolving Loan that is a Eurodollar Rate
Advance), on demand, from the Borrower, without prejudice to the Agent's and
the Borrower's rights against such Bank. If such Bank pays the Agent the
amount herein required with interest at the overnight Federal Funds rate
before the Agent has recovered from the Borrower, such Bank shall be entitled
to the interest payable by the Borrower with respect to the Revolving Loan in
question accruing from the date the Agent made such Revolving Loan. Not more
than nine Revolving Loans may be outstanding at any time during the term of
this Agreement.
Section 2.3 REVOLVING NOTES. The Advances of each Bank shall be
evidenced by a single Revolving Note payable to the order of such Bank in a
principal amount equal to such Bank's Revolving Commitment Amount originally
in effect. Upon receipt of each Bank's Revolving Note from the Borrower, the
Agent shall mail such Revolving Note to such Bank. Each Bank shall enter in
its ledgers and records the amount of each Revolving Loan, the various
Advances made, converted or continued and the payments made thereon, and each
Bank is authorized by the Borrower to enter on a schedule attached to its
Revolving Note a record of such Revolving Loans, Advances and payments;
provided, however that the failure by any 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 Revolving Notes, and, in all events, the
principal amounts owing by the Borrower in respect of the Revolving Notes
shall be the aggregate amount of all Revolving Loans made by the Banks less
all payments of principal thereof made by the Borrower.
Section 2.4 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 or Eurodollar Rate Advances, or to continue a
Eurodollar Rate Advance as such; provided, however that a Eurodollar Rate
Advance may be converted or continued only on the last day of the Interest
Period applicable thereto and no Advance may be converted to or continued as
a Eurodollar 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, Eurodollar Rate Advances only in
integral multiples, as to the aggregate amount of the Advances of all Banks
so converted or continued, of $100,000 or, if larger, in integral multiples
of $100,000. The Borrower shall give the Agent written notice of any
continuation or conversion of any Advances and such notice must be given so
as to be received by the Agent not later than 12:00 noon (Minneapolis time)
two Eurodollar Business Days prior to
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requested date of conversion or continuation in the case of the continuation
of, or conversion to, Eurodollar Rate Advances and on the date of the
requested conversion to 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 Eurodollar Rate
Advances, and (ii) a Eurodollar Business Day in the case of continuations as
or conversions to Eurodollar Rate Advances and a Business Day in the case of
conversions to Reference Rate Advances), and (c) in the case of conversions
to or continuations as Eurodollar 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 Agent of the
continuation of any Eurodollar 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. All conversions and continuation of Advances
must be made uniformly and ratably among the Banks. (E.g., when continuing a
two-month Eurodollar Rate Advance of one Bank to a three-month Eurodollar
Rate Advance, the Borrower must simultaneously continue all two-month
Eurodollar Rate Advances of all Banks having Interest Periods ending on the
date of continuation as three-month Eurodollar Rate Advances.)
Section 2.5 INTEREST RATES, INTEREST PAYMENTS AND DEFAULT INTEREST.
Interest shall accrue and be payable on the Revolving Loans as follows:
2.5(a) Subject to paragraph (c) below, each Eurodollar 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 sum of (i) the Adjusted Eurodollar Rate for such Interest Period,
plus (ii) the Applicable Margin.
2.5(b) Subject to paragraph (c) below, each Reference Rate
Advance shall bear interest on the unpaid principal amount thereof at a
varying rate per annum equal to the Reference Rate.
2.5(c) Upon the occurrence of any Event of Default, each Advance
shall, at the option of the Majority Banks, bear interest until paid in
full (i) during the balance of any Interest Period applicable to such
Advance, at a rate per annum equal to the sum of the rate applicable to
such Advance during such Interest Period plus 2.0%, and (ii) otherwise,
at a rate per annum equal to the Reference Rate plus 2.0%.
2.5(d) Interest shall be payable (i) with respect to each
Eurodollar Rate Advance having an Interest Period of three months or
less, on the
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last day of the Interest Period applicable thereto; (ii) with respect to
any Eurodollar Rate Advance having an Interest Period greater than three
months, on the last day of the Interest Period applicable thereto and on
each day that would have been the last day of the Interest Period for
such Advance had successive Interest Periods of three months duration
been applicable to such Advance; (iii) with respect to any Reference
Rate Advance, on the last day of each month; (iv) with respect to all
Advances, upon any permitted prepayment (on the amount prepaid); and (E)
with respect to all Advances, on the Termination Date; provided that
interest under Section 2.5 (c) shall be payable on demand.
2.5(e) Interest on all or a portion (in increments of not less
than $5,000,000) of the Revolving Notes may be converted at the request
of the Borrower and with the consent and approval of all of the Banks to
a fixed rate per annum from the conversion date (which shall be a date
on which no Eurodollar Rate Advances are outstanding with respect to the
portion being so converted) to a Business Day not later than the
Termination Date, which fixed rate per annum shall be determined by the
Banks, in which case the Banks and the Borrower will enter such
amendments as the Banks and the Agent deem reasonably necessary to
effect such conversion.
Section 2.6 REPAYMENT. The unpaid principal amount of all Advances,
together with all accrued and unpaid interest thereon, shall be due and payable
on the Termination Date.
Section 2.7 PREPAYMENTS.
2.7(a) MANDATORY PAYMENTS. If at any time a Borrowing Base
Deficiency exists, the Borrower shall immediately pay on the principal
of the Advances an amount equal to such Borrowing Base Deficiency. Any
such payments shall be applied first against Reference Rate Advances and
then to Eurodollar Rate Advances in order starting with the Eurodollar
Rate Advances having the shortest time to the end of the applicable
Interest Period. Amounts paid on the Advances under this paragraph (a)
shall be for the account of each Bank in proportion to its share of
outstanding Revolving Loans. If, after paying all outstanding Advances,
a Borrowing Base Deficiency still exists, the Borrower shall pay into
the Holding Account an amount equal to the amount of the remaining
Borrowing Base Deficiency.
2.7(b) OTHER MANDATORY PREPAYMENTS. If at any time Total
Revolving Outstandings exceed the Aggregate Revolving Commitment
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Amounts, the Borrower shall immediately repay to the Agent for the
account of the Banks the amount of such excess. Any such payments shall
be applied first against Reference Rate Advances and then to Eurodollar
Rate Advances in order starting with the Eurodollar Rate Advances having
the shortest time to the end of the applicable Interest Period. If,
after payment of all outstanding Advances, the Total Revolving
Outstandings still exceed the Aggregate Revolving Commitment Amounts,
the remaining amount paid by the Borrower shall be placed in the Holding
Account.
2.7(c) OPTIONAL PREPAYMENTS. The Borrower may prepay
Reference Rate Advances, in whole or in part, at any time, without
premium or penalty. Any such prepayment must be accompanied by accrued
and unpaid interest on the amount prepaid. Each partial prepayment
shall be in an aggregate amount for all the Banks of $100,000 or an
integral multiple thereof. Except upon an acceleration following an
Event of Default or upon termination of the Revolving Commitments in
whole, the Borrower may pay Eurodollar Rate Advances only on the last
day of the Interest Period applicable thereto. Amounts paid (unless
following an acceleration or upon termination of the Revolving
Commitments in whole) or prepaid on Advances under this paragraph (c)
may be reborrowed upon the terms and subject to the conditions and
limitations of this Agreement. Amounts paid or prepaid on the Advances
under this paragraph (c) shall be for the account of each Bank in
proportion to its share of outstanding Revolving Loans.
PART B -- TERMS OF THE LETTER OF CREDIT FACILITY
Section 2.8 LETTERS OF CREDIT. Upon the terms and subject to the
conditions of this Agreement, the Agent agrees to issue Letters of Credit for
the account of the Borrower from time to time between the Closing Date and
the Termination Date in such amounts as the Borrower shall request up to an
aggregate amount at any time outstanding not exceeding the Letter of Credit
Sublimit; provided that no Letter of Credit will be issued in any amount
which, after giving effect to such issuance, would cause Total Revolving
Outstandings to exceed the lesser of (a) the Aggregate Revolving Commitment
Amounts, or (b) the Borrowing Base.
Section 2.9 PROCEDURES FOR LETTERS OF CREDIT. Each request for a
Letter of Credit shall be made by the Borrower in writing, by telex,
facsimile transmission or electronic conveyance received by the Agent by 2:00
p.m., Minneapolis time, on a Business Day which is not less than one Business
Day preceding the requested date of issuance (which shall also be a Business
Day).
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Each request for a Letter of Credit shall be deemed a representation by the
Borrower that on the date of issuance of such Letter of Credit and after
giving effect thereto the applicable conditions specified in Article III have
been and will be satisfied. The Agent may require that such request be made
on such letter of credit application and reimbursement agreement form as the
Agent may from time to time specify, along with satisfactory evidence of the
authority and incumbency of the officials of the Borrower making such
request. The Agent shall promptly notify the other Banks of the receipt of
the request and the matters specified therein. On the date of each issuance
of a Letter of Credit the Agent shall send notice to the other Banks of such
issuance, accompanied by a copy of the Letter or Letters of Credit so issued.
Section 2.10 TERMS OF LETTERS OF CREDIT. Letters of Credit shall be
issued in support of obligations of the Borrower. All Letters of Credit must
expire not later than the Business Day preceding the Revolving Commitment
Ending Date. No Letter of Credit may have a term longer than twelve months.
Section 2.11 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. If the
Agent has received documents purporting to draw under a Letter of Credit that
the Agent believes conform to the requirements of the Letter of Credit, or if
the Agent has decided that it will comply with the Borrower's written or oral
request or authorization to pay a drawing on any Letter of Credit that the
Agent does not believe conforms to the requirements of the Letter of Credit,
it will notify the Borrower of that fact. The Borrower shall reimburse the
Agent by 9:30 a.m. (Minneapolis time) on the day on which such drawing is to
be paid in Immediately Available Funds in an amount equal to the amount of
such drawing. Any amount by which the Borrower has failed to reimburse the
Agent for the full amount of such drawing by 10:00 a.m. on the date on which
the Agent in its notice indicated that it would pay such drawing, until
reimbursed from the proceeds of Loans pursuant to Section 2.14 or out of
funds available in the Holding Account, is an "Unpaid Drawing."
Section 2.12 OBLIGATIONS ABSOLUTE. The obligation of the Borrower
under Section 2.11 to repay the Agent for any amount drawn on any Letter of
Credit and to repay the Banks for any Revolving Loans made under Section 2.14
to cover Unpaid Drawings shall be absolute, unconditional and irrevocable,
shall continue for so long as any Letter of Credit is outstanding
notwithstanding any termination of this Agreement, and shall be paid strictly
in accordance with the terms of this Agreement, under all circumstances
whatsoever, including without limitation the following circumstances:
2.12(a) Any lack of validity or enforceability of any Letter
of Credit;
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2.12(b) The existence of any claim, setoff, defense or other
right which the Borrower may have or claim at any time against any
beneficiary, transferee or holder of any Letter of Credit (or any Person
for whom any such beneficiary, transferee or holder may be acting), the
Agent or any Bank or any other Person, whether in connection with a
Letter of Credit, this Agreement, the transactions contemplated hereby,
or any unrelated transaction; or
2.12(c) Any statement or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever.
Neither the Agent nor any Bank nor officers, directors or employees of any
thereof shall be liable or responsible for, and the obligations of the Borrower
to the Agent and the Banks shall not be impaired by:
(i) The use which may be made of any Letter of Credit or for
any acts or omissions of any beneficiary, transferee or holder thereof
in connection therewith;
(ii) The validity, sufficiency or genuineness of documents,
or of any endorsements thereon, even if such documents or endorsements
should, in fact, prove to be in any or all respects invalid,
insufficient, fraudulent or forged;
(iii) The acceptance by the Agent of documents that appear on
their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary;
or
(iv) Any other action of the Agent in making or failing to
make payment under any Letter of Credit if in good faith and in
conformity with U.S. or foreign laws, regulations or customs applicable
thereto.
Notwithstanding the foregoing, the Borrower shall have a claim against the
Agent, and the Agent shall be liable to the Borrower, to the extent, but only
to the extent, of any direct, as opposed to consequential, damages suffered
by the Borrower which the Borrower proves were caused by the Agent's willful
misconduct or gross negligence in determining whether documents presented
under any Letter of Credit comply with the terms thereof.
PART C -- GENERAL
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Section 2.13 OPTIONAL REDUCTION OF REVOLVING COMMITMENT AMOUNTS OR
TERMINATION OF REVOLVING COMMITMENTS. The Borrower may, at any time, upon
not less than two Business Days prior written notice to the Agent, reduce the
Revolving Commitment Amounts, ratably, with any such reduction in a minimum
aggregate amount for all the Banks of $1,000,000, or, if more, in an integral
multiple of $1,000,000; PROVIDED, HOWEVER, that the Borrower may not at any
time reduce the Aggregate Revolving Commitment Amounts below the Total
Revolving Outstandings. The Borrower may, at any time when there are no
Letters of Credit outstanding, upon not less than two Business Days prior
written notice to the Agent, terminate the Revolving Commitments in their
entirety. Upon termination of the Revolving Commitments pursuant to this
Section, the Borrower shall pay to the Agent for the account of the Banks the
full amount of all outstanding Advances, all accrued and unpaid interest
thereon, all unpaid Revolving Commitment Fees accrued to the date of such
termination, any indemnities payable with respect to Advances pursuant to
Section 2.25 and all other unpaid obligations of the Borrower to the Agent
and the Banks hereunder.
Section 2.14 LOANS TO COVER UNPAID DRAWINGS. Whenever any Unpaid
Drawing exists for which there are not then funds in the Holding Account to
cover the same, the Agent shall give the other Banks notice to that effect,
specifying the amount thereof, in which event each Bank is authorized (and
the Borrower does here so authorize each Bank) to, and shall, make a
Revolving Loan (as a Reference Rate Advance) to the Borrower in an amount
equal to such Bank's Revolving Percentage of the amount of the Unpaid
Drawing. The Agent shall notify each Bank by 11:00 a.m. (Minneapolis time)
on the date such Unpaid Drawing occurs of the amount of the Revolving Loan to
be made by such Bank. Notices received after such time shall be deemed to
have been received on the next Business Day. Each Bank shall then make such
Revolving Loan (regardless of noncompliance with the applicable conditions
precedent specified in Article III hereof and regardless of whether an Event
of Default then exists) and each Bank shall provide the Agent with the
proceeds of such Revolving Loan in Immediately Available Funds, at the office
of the Agent, not later than 2:00 p.m. (Minneapolis time) on the day on which
such Bank received such notice (or, in the case of notices received after
11:00 a.m., Minneapolis time, is deemed to have received such notice). The
Agent shall apply the proceeds of such Revolving Loans directly to reimburse
itself for such Unpaid Drawing. If any portion of any such amount paid to
the Agent should be recovered by or on behalf of the Borrower from the Agent
in bankruptcy, by assignment for the benefit of creditors or otherwise, the
loss of the amount so recovered shall be ratably shared between and among the
Banks in the manner contemplated by Section 8.10 hereof. If at the time the
Banks make funds available to the Agent pursuant to the provisions of this
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Section, the applicable conditions precedent specified in Article III shall
not have been satisfied, the Borrower shall pay to the Agent for the account
of the Banks interest on the funds so advanced at a floating rate per annum
equal to the sum of the Reference Rate plus two percent (2.00%). If for any
reason any Bank is unable to make a Revolving Loan to the Borrower to
reimburse the Agent for an Unpaid Drawing, then such Bank shall immediately
purchase from the Agent a risk participation in such Unpaid Drawing, at par,
in an amount equal to such Bank's Revolving Percentage of the Unpaid Drawing.
Section 2.15 REVOLVING COMMITMENT FEE. The Borrower shall pay to the
Agent for the account of each Bank fees (the "Revolving Commitment Fees") in
an amount determined by applying the applicable rate per annum set forth
below corresponding to the Cash Flow Leverage Ratio of the Borrower as at end
of the preceding quarter to the average daily Unused Revolving Commitment of
such Bank for the period from the Closing Date to the Termination Date. Such
Revolving Commitment Fees are payable in arrears quarterly on the last day of
each fiscal quarter and on the Termination Date.
Cash Flow Leverage Ratio Rate Per annum
------------------------------------------------------------------
GREATER THAN 3.00 0.300%
GREATER THAN 2.25 and LESS THAN OR EQUAL TO 3.00 0.250%
GREATER THAN 1.75 and LESS THAN OR EQUAL TO 2.25 0.200%
GREATER THAN 1.00 and LESS THAN OR EQUAL TO 1.75 0.150%
LESS THAN OR EQUAL TO 1.00 0.125%
Section 2.16 LETTER OF CREDIT FEES AND ADMINISTRATIVE FEES. For each
Letter of Credit issued, the Borrower shall pay to the Agent for the account
of the Banks, in advance payable on the date of issuance, a fee (a "Letter of
Credit Fee") in an amount determined by applying the applicable per annum
rate set forth below (corresponding to the Borrower's Cash Flow Leverage
Ratio as of the Borrower as at the end of the preceding quarter) to the
original face amount of the Letter of Credit for the period from the date of
issuance to the scheduled expiration date of such Letter of Credit.
Cash Flow Leverage Ratio Applicable Margin
------------------------------------------------------------------
GREATER THAN 3.00 1.250%
GREATER THAN 2.25 and LESS THAN OR EQUAL TO 3.00 1.000%
GREATER THAN 1.75 and LESS THAN OR EQUAL TO 2.25 0.750%
GREATER THAN 1.00 and LESS THAN OR EQUAL TO 1.75 0.625%
LESS THAN OR EQUAL TO 1.00 0.500%
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In addition to the Letter of Credit Fee, the Borrower shall pay to the
Agent, on demand, all issuance, amendment, drawing and other fees regularly
charged by the Agent to its letter of credit customers and all out-of-pocket
expenses incurred by the Agent in connection with the issuance, amendment,
administration or payment of any Letter of Credit, and a fronting fee for
each Letter of Credit issued equal to 10 basis points of the stated amount of
the Letter of Credit as of the date of issuance.
The Borrower shall pay to the Agent an annual administrative fee (the
"Administrative Fee") equal to the lesser of (a) $5,000 for each Bank (other
than U.S, Bank), and (b) $10,000, payable quarterly in advance, commencing on
the date on which the first such Bank becomes a party hereto.
Section 2.17 COMPUTATION. Revolving Commitment Fees and Letter of
Credit Fees and interest on Advances shall be computed on the basis of actual
days elapsed (or, in the case of Letter of Credit Fees which are paid in
advance, actual days to elapse) and a year of 360 days.
Section 2.18 PAYMENTS. Payments and prepayments of principal of, and
interest on, the Revolving Notes and all fees, expenses and other obligations
under this Agreement payable to the Agent or the Banks shall be made without
setoff or counterclaim in Immediately Available Funds not later than 1:00p.m.
(Minneapolis time) on the dates called for under this Agreement and the
Revolving Notes to the Agent at its main office in Minneapolis, Minnesota.
Funds received after such time shall be deemed to have been received on the
next Business Day. The Agent will promptly distribute in like funds to each
Bank its ratable share of each such payment of principal, interest, Revolving
Commitment Fees and Letter of Credit Fees received, by the Agent for the
account of the Banks. Whenever any payment to be made hereunder or on the
Revolving 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 2.19 REVOLVING COMMITMENT ENDING DATE. The "Revolving
Commitment Ending Date" is December 31, 2001.
Section 2.20 USE OF LOAN PROCEEDS. The proceeds of the Revolving Loans
shall be used for the Borrower's general business purposes in a manner not in
conflict with any of the Borrower's covenants in this Agreement.
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Section 2.21 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 Advance, any Bank determines (which
determination shall be conclusive and binding, absent error) that:
2.12(a) deposits in dollars (in the applicable amount) are not
being made available to such Bank in the relevant market for such
Interest Period, or
2.12(b) the Adjusted Eurodollar Rate will not adequately and
fairly reflect the cost to such Bank of funding or maintaining
Eurodollar Rate Advances for such Interest Period,
such Bank shall forthwith give notice to the Borrower and the other Banks of
such determination, whereupon the obligation of such Bank to make or
continue, or to convert any Advances to, Eurodollar Rate Advances shall be
suspended until such Bank notifies the Borrower and the Agent that the
circumstances giving rise to such suspension no longer exist. While any such
suspension continues, all further Advances by such Bank shall be made as
Reference 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 2.22 INCREASED COST. If any Regulatory Change:
2.22(a) shall subject any Bank (or its Applicable Lending
Office) to any tax, duty or other charge with respect to its Eurodollar
Rate Advances, its Revolving Note or its obligation to make Eurodollar
Rate Advances or shall change the basis of taxation of payment to any
Bank (or its Applicable Lending Office) of the principal of or interest
on its Eurodollar Rate Advances or any other amounts due under this
Agreement in respect of its Eurodollar Rate Advances or its obligation
to make Eurodollar Rate Advances (except for changes in the rate of tax
on the overall net income of such Bank or its Applicable Lending Office
imposed by the jurisdiction in which such Bank's principal office or
Applicable Lending Office is located); or
2.22(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,
any
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Bank's Applicable Lending Office or against Letters of Credit issued by
the Agent or shall impose on any Bank (or its Applicable Lending Office)
or the interbank Eurodollar market any other condition affecting its
Eurodollar Rate Advances, its Revolving Note or its obligation to make
Eurodollar Rate Advances or affecting any Letter of Credit;
and the result of any of the foregoing is to increase the cost to such Bank
(or its Applicable Lending Office) of making or maintaining any Eurodollar
Rate Advance or issuing or maintaining any Letter of Credit, or to reduce the
amount of any sum received or receivable by such Bank (or its Applicable
Lending Office) under this Agreement or under its Revolving Note, then,
within 30 days after demand by such Bank (with a copy to the Agent), the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction. Each Bank will
promptly notify the Borrower and the Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle such Bank to
compensation pursuant to this Section and will designate a different
Applicable Lending Office if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. If any Bank fails to give
such notice within 45 days after it obtains knowledge of such an event, such
Bank shall, with respect to compensation payable pursuant to this Section,
only be entitled to payment under this Section for costs incurred from and
after the date 45 days prior to the date that such Bank does give such
notice. A certificate of any 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 error. In determining
such amount, any Bank may use any reasonable averaging and attribution
methods. Failure on the part of any 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 such Bank's rights to
demand compensation for any increased costs or reduction in amounts received
or receivable in any subsequent Interest Period.
Section 2.23 ILLEGALITY. If any Regulatory Change shall make it
unlawful or impossible for any Bank to make, maintain or fund any Eurodollar
Rate Advances, such Bank shall notify the Borrower and the Agent, whereupon the
obligation of such Bank to make or continue, or to convert any Advances to,
Eurodollar Rate Advances shall be suspended until such Bank notifies the
Borrower and the Agent that the circumstances giving rise to such suspension no
longer exist. Before giving any such notice, such Bank shall designate a
different Applicable Lending Office if such designation will avoid the need for
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giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such 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 such
Bank's notice, and upon such conversion the Borrower shall indemnify such
Bank in accordance with Section 2.25.
Section 2.24 CAPITAL ADEQUACY. In the event that any Regulatory Change
reduces or shall have the effect of reducing the rate of return on any Bank's
capital or the capital of its parent corporation (by an amount such Bank
deems material) as a consequence of its Revolving Commitment and/or Advances
and/or any Letters of Credit or any Bank's obligations to make Advances to
cover Letters of Credit to a level below that which such Bank or its parent
corporation could have achieved but for such Regulatory Change (taking into
account such Bank's policies and the policies of its parent corporation with
respect to capital adequacy), then the Borrower shall, within 30 days after
written notice and demand from such Bank (with a copy to the Agent), pay to
such Bank additional amounts sufficient to compensate such Bank or its parent
corporation for such reduction. If any Bank fails to give such notice within
45 days after it obtains knowledge of such an event, such Bank shall, with
respect to compensation payable pursuant to this Section, only be entitled to
payment under this Section for diminished returns as a result of such
reduction for the period from and after the date 45 days prior to the date
that such Bank does give such notice. Any determination by such Bank under
this Section and any certificate as to the amount of such reduction given to
the Borrower by such Bank shall be final, conclusive and binding for all
purposes, absent error.
Section 2.25 FUNDING LOSSES; EURODOLLAR RATE ADVANCES. The Borrower
shall compensate each Bank, upon its written request, for all losses,
expenses and liabilities (including any interest paid by such Bank to lenders
of funds borrowed by it to make or carry Eurodollar Rate Advances to the
extent not recovered by such Bank in connection with the re-employment of
such funds and including loss of anticipated profits) which such Bank may
sustain: (i) if for any reason, other than a default by such 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 2.4,
or (ii) if, for whatever reason (including, but not limited to, acceleration
of the maturity of Advances following an Event of Default), any repayment of
a Eurodollar Rate Advance, or a conversion pursuant to Section 2.23, occurs
on any day other than the last day of the Interest Period applicable thereto. A
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Bank's request for compensation shall set forth the basis for the amount
requested and shall be final, conclusive and binding, absent error.
Section 2.26 DISCRETION OF BANKS AS TO MANNER OF FUNDING. Each 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 2.25) shall be made as if such
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.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS OF INITIAL TRANSACTION. The making of the
initial Revolving Loans and the issuance of the initial Letter of Credit
shall be subject to the prior or simultaneous fulfillment of the following
conditions:
3.1(a) DOCUMENTS. The Agent shall have received the following
in sufficient counterparts (except for the Revolving Notes) for each Bank:
(i) A Revolving Note drawn to the order of each Bank
executed by a duly authorized officer (or officers) of the
Borrower and dated the Closing Date.
(ii) A copy of the corporate resolution of the
Borrower authorizing the execution, delivery and performance of
the Borrower Loan Documents, certified as of the Closing Date
by the Secretary or an Assistant Secretary of the Borrower.
(iii) An incumbency certificate showing the names and
titles and bearing the signatures of the officers of the
Borrower authorized to execute the Borrower Loan Documents and
to request Revolving Loans, Letters of Credit and conversions
and continuations of Advances hereunder, certified as of the
Closing Date by the Secretary or an Assistant Secretary of the
Borrower.
(iv) A copy of the Certificate of Incorporation of the
Borrower with all amendments thereto, certified by the
appropriate
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governmental official of the jurisdiction of its incorporation
as of a date not more than fifteen days prior to the Closing
Date.
(v) A certificate of good standing for the Borrower
in the jurisdiction of its incorporation (Delaware) and in the
States of Wisconsin, California, Georgia and Oregon, certified
by the appropriate governmental officials as of a date not more
than fifteen days prior to the Closing Date.
(vi) A copy of the bylaws of the Borrower, certified
as of the Closing Date by the Secretary or an Assistant
Secretary of the Borrower.
(vii) Copies of current UCC, judgments and tax lien
searches against the Borrower in the State of Delaware,
Wisconsin, California, Oregon and Georgia.
(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.
(ix) The initial Borrowing Base Certificate required
under Section 5.1.
(x) A copy of each of the executed Senior Unsecured
Note Documents, certified as true and correct
copies by an officer of the Borrower.
3.1(b) OPINION. The Borrower and its Subsidiaries shall have
requested Xxxxxxxxxxx Xxxxx & Xxxxxxxx LLP, its counsel, to prepare a
written opinion, addressed to the Banks and dated the Closing Date,
covering the matters set forth in EXHIBIT 3.1(A) hereto, and such
opinion shall have been delivered to the Agent in sufficient
counterparts for each Bank.
3.1(c) 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 and no Default or Event
of Default shall have occurred and be continuing.
3.1(d) OTHER MATTERS. All corporate and legal proceedings
relating to the Borrower and all instruments and agreements in
connection with
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the transactions contemplated by this Agreement shall be satisfactory in
scope, form and substance to the Agent, the Banks and the Agent's
special counsel, and the Agent shall have received all information and
copies of all documents, including records of corporate proceedings, as
any Bank or such special 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 Agent shall have received for
itself and for the account of the Banks 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 Agent payable
pursuant to Section 9.2, and the Agent shall have received for its own
account the arrangement fee (the "Arrangement Fee") set forth in the Fee
Letter.
Section 3.2 CONDITIONS PRECEDENT TO ALL LOANS AND LETTERS OF CREDIT.
The obligation of the Banks to make any Revolving Loans hereunder (including the
initial Revolving Loans) and of the Agent to issue each Letter of Credit
(including the initial Letter of Credit) 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 Revolving Loan or the date of
issuance of each Letter of Credit, 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
Revolving Loan or the date of issuance of each Letter of Credit or will
exist after giving effect to the Loans made on such date or the Letter of
Credit so issued.
3.2(c) NOTICES AND REQUESTS. The Agent shall have received the
Borrower's request for such Revolving Loans as required under Section 2.2
or its application for such Letters of Credit specified under Section
2.9.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
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To induce the Banks to enter into this Agreement and to make Revolving
Loans hereunder and to induce the Agent to issue Letters of Credit, the
Borrower represents and warrants to the Banks:
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 Revolving Notes and to perform its
obligations under the Borrower 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 Borrower Loan Documents have been duly
authorized by all necessary corporate action by the Borrower, and this
Agreement constitutes, and the Revolving Notes and other Borrower 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 Borrower 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
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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 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, 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,
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 or its Subsidiaries 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.
Section 4.5 FINANCIAL STATEMENTS AND CONDITION. The Borrower's
audited consolidated financial statements as at December 31, 1997 and its
unaudited financial statements as at June 30, 1998, as heretofore furnished to
the Banks, have been prepared in accordance with GAAP on a consistent basis
(except for the absence of footnotes and subject to year-end audit
adjustments as to the interim statements) 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, 1997, 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
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Subsidiary, could reasonably be expected to 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 could reasonably be
expected to impose a material liability on the Borrower or a Subsidiary or to
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 non-compliance 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 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 Banks) of such Plan's
accumulated benefit obligations did not exceed the fair market value of such
Plan's assets by more than $50,000.
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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 except as allowed under Section 6.2.
None of such properties is subject to a Lien, except as allowed under Section
6.14. 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.
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.
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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 in an
aggregate amount exceeding $50,000.
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
Banks consisting of projections or forecasts of future results or events have
been prepared in good faith and based on good faith estimates and
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assumptions of the management of the Borrower, and the Borrower has no reason
to believe that such projections or forecasts are not reasonable.
Section 4.19 SUBSIDIARIES. The Borrower has no Subsidiaries.
ARTICLE V
AFFIRMATIVE COVENANTS
Until any obligation of the Banks hereunder to make the Revolving
Loans and of the Agent to issue Letters of Credit shall have expired or been
terminated and the Revolving Notes and all of the other Obligations have been
paid in full and all outstanding Letters of Credit shall have expired or the
liability of the Agent thereon shall have otherwise been discharged, unless
the Majority Banks shall otherwise consent in writing:
Section 5.1 FINANCIAL STATEMENTS AND REPORTS. The Borrower will
furnish to the Banks:
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
Xxxxxx Xxxxxxxx, LLP or other independent certified public accountants
of recognized national standing selected by the Borrower and acceptable
to the Agent, together with (a) form 10K filed with the Securities and
Exchange Commission, and (b) 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) Together with the audited financial statements required
under Section 5.1 (a), a statement by the accounting firm performing
such audit to the effect that it has reviewed this Agreement and that in
the course of performing its examination nothing came to its attention
that caused it to believe that any Default or Event of Default exists
under Sections 6.7, 6.10, 6.12, 6.13, 6.15, 6.16, 6.17 or 6.18, or, if
such Default or Event of Default exists, describing its nature.
5.1(c) As soon as available and in any event within 45 days
after the end of each fiscal quarter, unaudited consolidated statements
of
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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), together with
form 10Q filed with the Securities and Exchange Commission.
5.1(d) As soon as practicable and in any event within 45 days
after the end of each of the first three fiscal quarters of each fiscal
year, a Compliance Certificate in the form attached hereto as EXHIBIT
5.1(d) signed by the chief financial officer of the Borrower
demonstrating in reasonable detail compliance (or noncompliance, as the
case may be) with these Sections: 6.16, 6.17 and 6.18, 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(e) As soon as practicable and in any event within fifteen
days after the end of each month, a Borrowing Base Certificate signed by
the chief financial officer of the Borrower, reporting the Borrowing
Base as of the last day of the month just ended.
5.1(f) As soon as practicable and in any event within 90 days
after the beginning of each fiscal year of the Borrower, statements of
forecasted consolidated income for the Borrower and the Subsidiaries for
each fiscal quarter in such fiscal year and each fiscal year thereafter
to the Termination Date and a forecasted consolidated balance sheet of
the Borrower and the Subsidiaries, together with supporting assumptions,
as at the end of each fiscal year, all in reasonable detail and
reasonably satisfactory in scope to Majority Banks.
5.1(g) 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.
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5.1(h) 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 which could reasonably be expected
to result in a material excise tax or civil penalty payable directly or
indirectly by the Borrower or otherwise have a material adverse effect,
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(i) 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(j) From time to time, such other information regarding the
business, operation and financial condition of the Borrower and the
Subsidiaries as any 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. Such insurance policies may be subject to deductibles and
self-insurance 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
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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. The Borrower shall permit any Person
designated by the Agent or the Majority Banks 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
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 Agent or the Majority Banks may designate. So long as
no Event of Default exists, the expenses of the Agent or the Banks for such
visits, inspections and examinations shall be at the expense of the Agent and
the Banks, 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
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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 Agent 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 reasonably be expected to 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 $50,000, (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 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 $50,000 or (c) fail to make any
payments in an aggregate amount exceeding $50,000 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 non-compliance 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 Agent 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
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adverse determination or result could reasonably be expected to 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 YEAR 2000. The Borrower will (a) review and assess its
business operations, equipment and machinery and computer systems and
applications to address the "year 2000 problem" (that is, that computer
applications and other equipment used by the Borrower, directly or indirectly
through third parties, may be unable to properly perform date-sensitive
functions before, during and after January 1, 2000); (b) develop a plan and a
contingency plan which will include expense estimates to address the year
2000 problem and to remediate any material year 2000 problem; and (c)
substantially complete implementation of the plan and remediation of material
year 2000 problems by December 31, 1998, and testing thereof by July 1, 1999.
Section 5.13 OPERATING ACCOUNTS. The Borrower shall maintain all of its
and its Subsidiaries' material operating accounts (e.g., checking accounts,
savings and investment accounts, cash management accounts) with U.S. Bank or
its affiliates.
Section 5.14 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 Agent or the Majority Banks, 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 Agent or the Majority Banks 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
now or hereafter to be created by the Loan Documents; and (c) to better
assure, convey, grant, assign, transfer, preserve, protect and confirm unto
the Banks the rights granted now or hereafter intended to be granted to the
Banks 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 Agent
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for the benefit of the Banks in order to carry out the intention or
facilitate the performance of the provisions of any Loan Document. The
Borrower shall furnish to the Banks evidence satisfactory to the Majority
Banks of every such recording, filing or registration.
ARTICLE VI
NEGATIVE COVENANTS
Until any obligation of the Banks hereunder to make the Revolving Loans
and of the Agent to issue Letters of Credit shall have expired or been
terminated and the Revolving Notes and all of the other Obligations have been
paid in full and all outstanding Letters of Credit shall have expired or the
liability of the Agent thereon shall have otherwise been discharged, unless
the Majority Banks shall otherwise consent in writing:
Section 6.1 MERGER. The Borrower will not merge or consolidate or
enter into any analogous reorganization or transaction with any Person or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution) 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 inventory, or used, worn-out or surplus
equipment, all in the ordinary course of business;
6.2(b) 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(c) other dispositions of property during each fiscal year
of the Borrower which, in the aggregate, either (i)did not contribute
more than 10% of the consolidated net income of the Borrower and its
Subsidiaries (before extraordinary gains or losses) for any of the three
most recently ended fiscal years, or (ii) did not constitute more than 5%
of the total
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consolidated assets of the Company and its Subsidiaries as shown on its
balance sheet as at the end of its most recent prior fiscal year.
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
Banks) of such Plan's projected benefit obligations to exceed the fair market
value of such Plan's assets by more than $50,000.
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, or to enter into any new lines of business other than those engaged
in 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.
Section 6.6 NEGATIVE PLEDGES; SUBSIDIARY RESTRICTIONS. Except for the
Senior Unsecured Note Documents, 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 Banks 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 Banks 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 Banks. Except for
the Senior Unsecured Note Documents and this Agreement, 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.
Notwithstanding the above, in the event that the Borrower or any
Subsidiary creates or assumes any Lien upon any of its property or assets,
whether now owned or hereafter acquired, other than Liens permitted by
Section 6.14, the Borrower will make or cause to be made effective provisions
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whereby the Obligations hereunder will be secured by such Lien equally and
ratably with any and all other Indebtedness thereby secured so long as such
other Indebtedness shall be so secured.
Section 6.7 RESTRICTED PAYMENTS. The Borrower will not make any
Restricted Payments, except that during any fiscal year of the Borrower, the
Borrower may pay dividends or make distributions on or with respect to its
capital stock in an aggregate amount not exceeding 25% of the Borrower's
total consolidated net income as shown on its audited income statement for
its most recent prior 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 AND MANAGEMENT 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. The Borrower
will provide to the Agent written notice of any change of management of the
Borrower.
Section 6.10 CAPITAL EXPENDITURES. The Borrower will not, and will not
permit any Subsidiary to, make Capital Expenditures for non-revenue
generating capital assets in an amount exceeding $5 million on a consolidated
basis in any fiscal year.
Section 6.11 SUBORDINATED DEBT. The Borrower will not, and will not
permit any Subsidiary to (a) make any scheduled payment of the principal of
or interest on any Subordinated Debt which would be prohibited by the terms
of such Subordinated Debt and any related subordination agreement; (b)
directly or indirectly make any prepayment on or purchase, redeem or defease
any Subordinated Debt or offer to do so (whether such prepayment, purchase or
redemption, or offer with respect thereto, is voluntary or mandatory); (c)
amend or cancel the subordination provisions applicable to any Subordinated
Debt; (d) take or omit to take any action if as a result of such action or
omission the subordination of such Subordinated Debt, or any part thereof, to
the Obligations might be terminated, impaired or adversely affected; or (e)
omit to give the Agent prompt notice of any notice received from any holder
of Subordinated Debt, or any trustee therefor, or of any default under any
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agreement or instrument relating to any Subordinated Debt by reason whereof
such Subordinated Debt might become or be declared to be due or payable.
Section 6.12 INVESTMENTS. The Borrower will not, and will not permit
any Subsidiary to, acquire for value, make, have or hold any Investments,
except:
6.12(a) Investments existing on the date of this Agreement.
6.12(b) Reasonable travel advances to management personnel,
employees and sales agents and representatives in the ordinary course of
business.
6.12(c) Investments in readily marketable direct obligations
issued or guaranteed by the United States or any agency thereof and
supported by the full faith and credit of the United States.
6.12(d) Certificates of deposit or bankers' acceptances issued
by any commercial bank organized under the laws of the United States or
any State thereof which has (i) combined capital and surplus of at least
$100,000,000, and (ii) a credit rating with respect to its unsecured
indebtedness from a nationally recognized rating service that is
satisfactory to the Agent.
6.12(e) Commercial paper given the highest rating by a
nationally recognized rating service.
6.12(f) Repurchase agreements relating to securities issued or
guaranteed as to principal and interest by the United States of America.
6.12(g) Other readily marketable Investments in debt
securities which are reasonably acceptable to the Majority Banks.
6.12(h) Notes, chattel paper or other forms of seller-financed
installment sales of tractors and trailers in the ordinary course of
business and permitted by Section 6.2(c) which in the aggregate does not
exceed $3,000,000 at any time (valued at the outstanding principal
amount plus accrued interest as of the date of any determination).
6.12(i) Any other Investment, including acquisitions of real
estate and equipment not in the ordinary course of business, if the
aggregate consideration therefor does not exceed $100,000.
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Any Investments under clauses (c), (d), (e) or (f) above must mature within
one year of the acquisition thereof by the Borrower or a Subsidiary.
Section 6.13 INDEBTEDNESS. The Borrower will not, and will not permit
any Subsidiary to, incur, create, issue, assume or suffer to exist any
Indebtedness, except:
6.13(a) The Obligations.
6.13(b) Current Liabilities, other than for borrowed money,
incurred in the ordinary course of business.
6.13(c) Indebtedness existing on the date of this Agreement and
disclosed on SCHEDULE 6.13 hereto, but not including any extension or
refinancing thereof.
6.13(d) Indebtedness which, at the time of determination, does
not exceed the difference (but not less than zero) between (i) 15% of
consolidated net worth of the Borrower and its Subsidiaries, and (ii) the
aggregate balance of Indebtedness under Section 6.13(c) outstanding as of
the date of determination.
Section 6.14 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:
6.14(a) Any Liens which may hereafter be granted to the Agent
and the Banks to secure the Obligations.
6.14(b) Liens existing on the date of this Agreement and
disclosed on SCHEDULE 6.14 hereto.
6.14(c) Liens securing Indebtedness under Section 6.13(d).
6.14(d) 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.
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6.14(e) 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.
6.14(f) 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.
6.14(g) Liens incurred or deposits or pledges made or
given in connection with, or to secure payment of, indemnity,
performance or other similar bonds.
6.14(h) Liens arising solely by virtue of any statutory
or common law provision relating to banker's liens, rights of set-off or
similar rights and remedies as to deposit accounts or other funds
maintained with a creditor depository institution; PROVIDED THAT (i)
such deposit account is not a dedicated cash collateral account and is
not subject to restriction against access by the Borrower or a
Subsidiary in excess of those set forth by regulations promulgated by
the Board, and (ii) such deposit account is not intended by the Borrower
or any Subsidiary to provide collateral to the depository institution.
6.14(i) 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.
Section 6.15 CONTINGENT LIABILITIES. The Borrower will not, and will
not permit any Subsidiary to, be or become liable on any Contingent
Obligations, except Contingent Obligations existing on the date of this
Agreement and described on SCHEDULE 6.15, or which, if deemed to be
Indebtedness, would not cause a Default or Event of Default under any other
covenant contained in this Article VI.
Section 6.16 TANGIBLE NET WORTH. The Borrower will not permit its
Tangible Net Worth to be less than $45,000,000 at any time during the fiscal
quarter ending December 31, 1998, which $45,000,000 shall be cumulatively
increased at the beginning of each fiscal quarter thereafter by an amount
equal to 50% of the consolidated net income of the Borrower (if a positive
number) as
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shown on its income statement for the immediately preceding fiscal quarter.
(No adjustments shall be made for net losses.)
Section 6.17 INTEREST COVERAGE RATIO. The Borrower will not permit the
Interest Coverage Ratio, as of the last day of any fiscal quarter, for the
four consecutive fiscal quarters ending on that date to be less than 2.25 to
1.0.
Section 6.18 CASH FLOW LEVERAGE RATIO. The Borrower will not permit
the Cash Flow Leverage Ratio, as of the last day of any fiscal quarter for
the four consecutive fiscal quarters ending on that date to be more than 3.25
to 1.0.
Section 6.19 LOAN PROCEEDS. The Borrower will not, and will not
permit any Subsidiary to, use any part of the proceeds of any Revolving 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 G, U or X of the Board.
Section 6.20 SENIOR UNSECURED NOTE DOCUMENTS.
6.20(a) The Borrower will not enter into any amendment of the
Senior Unsecured Note Documents affecting any material terms of the
Notes (as defined in the Note Purchase Agreement) or covenants, and will
provide to the Agent a prior copy of any notice or confirmation
(including the Borrower's election to issue "Shelf Notes" thereunder)
given by the Borrower to the lender(s) thereunder, and a copy of any
waiver by the lender(s) thereunder promptly upon receipt.
6.20(b) None of such Notes, including the Shelf Notes, shall
be secured by any assets of the Borrower or any of its Subsidiaries. If
the Borrower elects to issue any such Shelf Notes, the payment terms
(other than interest rate and term) of such Shelf Notes shall be
substantially the same as the terms of the "Series A Notes" issued under
the Note Purchase Agreement, and the term thereof shall be within the
limits therefor set forth in the Note Purchase Agreement.
6.20(c) The Borrower will not optionally prepay (or purchase,
defease or otherwise retire) all or any portion of such Notes while any
of its Obligations under this Agreement remain outstanding.
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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 Revolving Note or any other Obligation, required to be made to the
Agent or any Bank pursuant to this Agreement.
7.1(b) Any representation or warranty made by or on behalf of
the Borrower, any Subsidiary or any Related Person in this Agreement or
any other Loan Document or by or on behalf of the Borrower, any
Subsidiary or any Related Person in any certificate, statement, report
or document herewith or hereafter furnished to any Bank or the Agent
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 30 calendar days after
whichever of the following dates is the earliest: (i) the date the
Borrower gives notice of such failure to the Banks, (ii) the date the
Borrower should have given notice of such failure to the Banks pursuant
to Section 5.1, or (iii) the date the Agent or any Bank gives notice of
such failure to the Borrower.
7.1(e) 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 thereof and shall not be discharged within 45 days,
or the Borrower or any Subsidiary shall make an assignment for the
benefit of creditors.
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7.1(f) 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 30 days, or an order for relief shall have
been entered against the Borrower or such Subsidiary.
7.1(g) 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 60 days undismissed.
7.1(h) A judgment or judgments for the payment of money in
excess of the sum of $1,000,000 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 60 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(i) 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 $5,000,000 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(j) Any execution or attachment shall be issued whereby any
substantial part of the property of the Borrower or any Subsidiary shall
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be taken or attempted to be taken and the same shall not have been
vacated or stayed within 30 days after the issuance thereof.
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 Commitments shall automatically terminate and the Revolving Notes
and all other Obligations shall automatically become immediately due and
payable, and the Borrower shall without demand pay into the Holding Account
an amount equal to the aggregate face amount of all outstanding Letters of
Credit; or (b) any other Event of Default shall occur and be continuing,
then, upon receipt by the Agent of a request in writing from the Majority
Banks, the Agent shall take any of the following actions so requested: (i)
declare the Revolving Commitments terminated, whereupon the Revolving
Commitments shall terminate, (ii) declare the outstanding unpaid principal
balance of the Revolving Notes, the accrued and unpaid interest thereon and
all other Obligations to be forthwith due and payable, whereupon the
Revolving 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, and (iii) demand that the Borrower pay into the
Holding Account an amount equal to the aggregate face amount of all
outstanding Letters of Credit. 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 when so
requested by the Majority Banks, the Agent 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 each Bank to
set off any Obligations owed to such Bank against all deposits and credits of
the Borrower with, and any and all claims of the Borrower against, such Bank.
Such right shall exist whether or not such 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 unmatured, and regardless of the existence or
adequacy of any collateral, guaranty or any other security, right or remedy
available to such Bank or the Banks. Each 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 such Bank to provide such notice shall not affect the
validity of the exercise of such
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setoff rights. Nothing in this Agreement shall be deemed a waiver or
prohibition of or restriction on any Bank to all rights of banker's Lien,
setoff and counterclaim available pursuant to law.
ARTICLE VIII
THE AGENT
The following provisions shall govern the relationship of the Agent with
the Banks.
Section 8.1 APPOINTMENT AND AUTHORIZATION. Each Bank appoints and
authorizes the Agent to take such action as agent on its behalf and to
exercise such respective powers under the Loan Documents as are delegated to
the Agent by the terms thereof, together with such powers as are reasonably
incidental thereto. Neither the Agent nor any of its directors, officers or
employees shall be liable for any action taken or omitted to be taken by it
under or in connection with the Loan Documents, except for its own gross
negligence or willful misconduct. The Agent shall act as an independent
contractor in performing its obligations as Agent hereunder and nothing
herein contained shall be deemed to create any fiduciary relationship among
or between the Agent, the Borrower or the Banks.
Section 8.2 NOTE HOLDERS. The Agent may treat the payee of any
Revolving Note as the holder thereof until written notice of transfer shall
have been filed with it, signed by such payee and in form satisfactory to the
Agent.
Section 8.3 CONSULTATION WITH COUNSEL. The Agent may consult with
legal counsel selected by it and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
Section 8.4 LOAN DOCUMENTS. The Agent shall not be under a duty to
examine or pass upon the validity, effectiveness, genuineness or value of any
of the Loan Documents or any other instrument or document furnished pursuant
thereto, and the Agent shall be entitled to assume that the same are valid,
effective and genuine and what they purport to be.
Section 8.5 U.S. BANK AND AFFILIATES. With respect to its Revolving
Commitment and the Revolving Loan made by it, U.S. Bank shall have the same
rights and powers under the Loan Documents as any other Bank and may exercise
the same as though it were not the Agent consistent with the terms thereof,
and U.S. Bank and its Affiliates may accept deposits from, lend
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money to and generally engage in any kind of business with the Borrower as if
it were not the Agent.
Section 8.6 ACTION BY AGENT. Except as may otherwise be expressly
stated in this Agreement, the Agent shall be entitled to use its discretion
with respect to exercising or refraining from exercising any rights which may
be vested in it by, or with respect to taking or refraining from taking any
action or actions which it may be able to take under or in respect of, the
Loan Documents. The Agent shall be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from acting) upon
the instructions of the Majority Banks, and such instructions shall be
binding upon all holders of Revolving Notes; provided, however, that the
Agent shall not be required to take any action which exposes the Agent to
personal liability or which is contrary to the Loan Documents or applicable
law. The Agent shall incur no liability under or in respect of any of the
Loan Documents by acting upon any notice, consent, certificate, warranty or
other paper or instrument believed by it to be genuine or authentic or to be
signed by the proper party or parties and to be consistent with the terms of
this Agreement.
Section 8.7 CREDIT ANALYSIS. Each Bank has made, and shall continue
to make, its own independent investigation or evaluation of the operations,
business, property and condition, financial and otherwise, of the Borrower in
connection with entering into this Agreement and has made its own appraisal
of the creditworthiness of the Borrower. Except as explicitly provided
herein, the Agent has no duty or responsibility, either initially or on a
continuing basis, to provide any Bank with any credit or other information
with respect to such operations, business, property, condition or
creditworthiness, whether such information comes into its possession on or
before the first Event of Default or at any time thereafter.
Section 8.8 NOTICES OF EVENT OF DEFAULT, ETC. In the event that the
Agent shall have acquired actual knowledge of any Event of Default or
Default, the Agent shall promptly give notice thereof to the Banks.
Section 8.9 INDEMNIFICATION. Each Bank agrees to indemnify the Agent,
as Agent (to the extent not reimbursed by the Borrower), ratably according to
such Bank's share of the aggregate Revolving Commitment Amounts from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on or incurred by the Agent in any way relating
to or arising out of the Loan Documents or any action taken or omitted by the
Agent under the Loan Documents, provided that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties,
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actions, judgments, suits, costs, expenses or disbursements resulting from
the Agent's gross negligence or willful misconduct. No payment by any Bank
under this Section shall relieve the Borrower of any of its obligations under
this Agreement.
Section 8.10 PAYMENTS AND COLLECTIONS. All funds received by the
Agent in respect of any payments made by the Borrower on the Revolving Notes,
Revolving Commitment Fees or Letter of Credit Fees shall be distributed
forthwith by the Agent among the Banks, in like currency and funds as
received, ratably according to each Bank's Revolving Percentage. After any
Event of Default has occurred, all funds received by the Agent, whether as
payments by the Borrower or as realization on collateral or on any
Guaranties, shall (except as may otherwise be required by law) be distributed
by the Agent in the following order: (a) first to the Agent or any Bank who
has incurred unreimbursed costs of collection with respect to any Obligations
hereunder, ratably to the Agent and each Bank in the proportion that the
costs incurred by the Agent or such Bank bear to the total of all such costs
incurred by the Agent and all Banks; (b) next to the Agent for the account of
the Banks (in accordance with their respective Revolving Percentages) for
application on the Revolving Notes; (c) next to the Agent for the account of
the Banks (in accordance with their respective Revolving Percentages) for any
unpaid Revolving Commitment Fees or Letter of Credit Fees owing by the
Borrower hereunder; and (d) last to the Agent to be held in the Holding
Account to cover any outstanding Letters of Credit.
Section 8.11 SHARING OF PAYMENTS. If any Bank shall receive and
retain any payment, voluntary or involuntary, whether by setoff, application
of deposit balance or security, or otherwise, in respect of Indebtedness
under this Agreement or the Revolving Notes in excess of such Bank's share
thereof as determined under this Agreement, then such Bank shall purchase
from the other Banks for cash and at face value and without recourse, such
participation in the Revolving Notes held by such other Banks as shall be
necessary to cause such excess payment to be shared ratably as aforesaid with
such other Banks; provided, that if such excess payment or part thereof is
thereafter recovered from such purchasing Bank, the related purchases from
the other Banks shall be rescinded ratably and the purchase price restored as
to the portion of such excess payment so recovered, but without interest.
Subject to the participation purchase obligation above, each Bank agrees to
exercise any and all rights of setoff, counterclaim or banker's lien first
fully against any Revolving Notes and participations therein held by such
Bank, next to any other Indebtedness of the Borrower to such Bank arising
under or pursuant to this Agreement and to any participations held by such
Bank in
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Indebtedness of the Borrower arising under or pursuant to this Agreement, and
only then to any other Indebtedness of the Borrower to such Bank.
Section 8.12 ADVICE TO BANKS. The Agent shall forward to the Banks
copies of all notices, financial reports and other communications received
hereunder from the Borrower by it as Agent, excluding, however, notices,
reports and communications which by the terms hereof are to be furnished by
the Borrower directly to each Bank.
Section 8.13 RESIGNATION. If at any time U.S. Bank shall deem it
advisable, in its sole discretion, it may submit to each of the Banks and the
Borrower a written notification of its resignation as Agent under this
Agreement, such resignation to be effective upon the appointment of a
successor Agent, but in no event later than 30 days from the date of such
notice. Upon submission of such notice, the Majority Banks may appoint a
successor Agent.
ARTICLE IX
MISCELLANEOUS
Section 9.1 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 effective unless the same shall be in writing and signed by the
Majority Banks, and then such amendment, modification, waiver or consent
shall be effective only in the specific instance and for the purpose for
which given. (The Agent may enter into amendments or modifications of, and
grant consents and waivers to departure from the provisions of, those Loan
Documents to which the Banks are not signatories without the Banks joining
therein, PROVIDED the Agent has first obtained the separate prior written
consent to such amendment, modification, consent or waiver from the Majority
Banks.) Notwithstanding the forgoing, no such amendment, modification,
waiver or consent shall:
9.1(a) Reduce the rate or extend the time of payment of
interest thereon, or reduce the amount of the principal thereof, or
modify any of the provisions of any Revolving Note with respect to the
payment or repayment thereof, without the consent of the holder of each
Revolving Note so affected; or
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9.1(b) Increase the amount or extend the time of any Revolving
Commitment of any Bank, without the consent of such Bank; or
9.1(c) Reduce the rate or extend the time of payment of any fee
payable to a Bank, without the consent of the Bank affected; or
9.1(d) Amend the definition of Majority Banks or otherwise
reduce the percentage of the Banks required to approve or effectuate any
such amendment, modification, waiver, or consent, without the consent of
all the Banks; or
9.1(e) Amend any of the foregoing Sections 9.1 (a) through (e)
or this Section 9.1(f) without the consent of all the Banks; or
9.1(f) Amend any provision of this Agreement relating to the
Agent in its capacity as Agent without the consent of the Agent; or
9.1(g) Amend any provision of this Agreement relating to the
issuance of Letters of Credit without the consent of the Agent.
Section 9.2 EXPENSES. Whether or not the transactions contemplated
hereby are consummated, the Borrower agrees to reimburse the Agent upon demand
for all reasonable out-of-pocket expenses paid or incurred by the Agent
(including filing and recording costs and fees and expenses of Xxxxxx & Xxxxxxx
LLP, counsel to the Agent) 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
Agent and each Bank upon demand for all reasonable out-of-pocket expenses
(including expenses of legal counsel) paid or incurred by the Agent or any 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 9.3 WAIVERS, ETC. No failure on the part of the Agent or the
holder of a Revolving 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 9.4 NOTICES. Except when telephonic notice is expressly
authorized by this Agreement, any notice or other communication to any party
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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 four days after the date of
mailing if mailed; provided, however, that any notice to the Agent or any
Bank under Article II hereof shall be deemed to have been given only when
received by the Agent or such Bank.
Section 9.5 TAXES. The Borrower agrees to pay, and save the Agent and
the Banks 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 Revolving Notes, which obligation of the Borrower shall
survive the termination of this Agreement.
Section 9.6 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
Borrower Loan Document without the prior written consent of all the Banks. Each
Bank may at any time sell, assign, transfer, grant participations in, or
otherwise dispose of any portion (in a minimum amount of $10,000,000) of its
Revolving Commitments, the Revolving Loans and/or Advances (each such interest
so disposed of being herein called a "Transferred Interest") to banks or other
financial institutions ("Transferees"); PROVIDED, HOWEVER, that a Bank may
dispose of a Transferred Interest only with the consents of the Agent and the
Borrower (which consents shall not be unreasonably withheld) and only upon
payment to the Agent by the parties to such disposition of a processing and
recording fee in the amount of $3,000 for each party. The Borrower agrees that
each Transferee shall be entitled to the benefits of Sections 2.22, 2.23, 2.24,
2.25, 9.2 and 9.7 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 any
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 such Bank hereunder and such Bank shall be released from its
duties and obligations under this Agreement to the extent of such assignment.
Notwithstanding the sale by any Bank of any participation hereunder, (a) no
participant shall be deemed to be or have the
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rights and obligations of a Bank hereunder except that any participant shall
have a right of setoff under Section 7.3 as if it were such Bank and the
amount of its participation were owing directly to such participant by the
Borrower and (b) such Bank shall not in connection with selling any such
participation condition such Bank's rights in connection with consenting to
amendments or granting waivers concerning any matter under any Loan Document
upon obtaining the consent of such participant other than on matters relating
to (i) any reduction in the amount of any principal of, or the amount of or
rate of interest on, any Revolving Note or Advance in which such
participation is sold, (ii) any postponement of the date fixed for any
payment of principal of or interest on any Revolving Note or Advance in which
such participation is sold, or (iii) the release of any guaranty. No Bank
shall be permitted to enter into any assignment or participation with any
Transferee who is not a United States Person unless such Transferee
represents and warrants to such Bank that, as at the date of such assignment
of participation, it is entitled to receive interest payments without
withholding or deduction of any taxes and such Transferee executes and
delivers to such Bank on or before the date of execution and delivery of
documentation of such participation or assignment, a United States Internal
Revenue Service Form1001 or 4224, or any successor to either of such forms,
as appropriate, properly completed and claiming complete exemption from
withholding and deduction of all federal income taxes. A "United States
Person" means any citizen, national or resident of the United States, any
corporation or other entity created or organized in or under the laws of the
United States or any political subdivision hereof or any estate or trust, in
each case that is not subject to withholding of United States federal income
taxes or other taxes on payment of interest, principal or fees hereunder..
Section 9.7 CONFIDENTIALITY OF INFORMATION. The Agent and each 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 Agent or such
Bank pursuant to the provisions hereof is used only for the purposes of this
Agreement and any other relationship between any Bank and the Borrower and shall
not be divulged to any Person other than the Banks, their Affiliates and their
respective officers, directors, employees and agents, except: (a) to their
attorneys and accountants, (b) in connection with the enforcement of the rights
of the Banks hereunder and under the Revolving Notes and the Guaranties 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, and (d) as may
otherwise be required or requested by any regulatory authority having
jurisdiction over any Bank or by any applicable law, rule, regulation or
judicial process, the opinion of such Bank's counsel concerning the making of
such
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disclosure to be binding on the parties hereto. No Bank shall incur any
liability to the Borrower by reason of any disclosure permitted by this
Section 9.7.
Section 9.8 GOVERNING LAW AND CONSTRUCTION. THE VALIDITY,
CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT AND THE REVOLVING 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 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 9.9 CONSENT TO JURISDICTION. AT THE OPTION OF THE AGENT, THIS
AGREEMENT AND THE OTHER BORROWER LOAN DOCUMENTS MAY BE ENFORCED IN ANY
FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN HENNEPIN COUNTY, MINNESOTA;
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 AGENT 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 9.10 WAIVER OF JURY TRIAL. EACH OF THE BORROWER , THE AGENT
AND THE BANKS 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.
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Section 9.11 SURVIVAL OF AGREEMENT. All representations, warranties,
covenants and agreement made by the Borrower herein or in the other Borrower
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 Banks and shall
survive the making of the Revolving Loans by the Banks and the execution and
delivery to the Banks by the Borrower of the Revolving Notes, regardless of
any investigation made by or on behalf of the Banks, and shall continue in
full force and effect as long as any Obligation is outstanding and unpaid and
so long as the Revolving Commitments have not been terminated; provided,
however, that the obligations of the Borrower under Section 9.2, 9.5 and 9.12
shall survive payment in full of the Obligations and the termination of the
Revolving Commitments.
Section 9.12 INDEMNIFICATION. The Borrower hereby agrees to defend,
protect, indemnify and hold harmless the Agent and the Banks and their
respective Affiliates and the directors, officers, employees, attorneys and
agents of the Agent and the Banks and their respective 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 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 Banks 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
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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
later of the Termination 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 9.13 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 9.14 ENTIRE AGREEMENT. This Agreement and the other Borrower
Loan Documents and the Fee Letter embody the entire agreement and
understanding between the Borrower, the Agent and the Banks 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 9.15 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.
Section 9.16 BORROWER ACKNOWLEDGEMENTS. The Borrower hereby
acknowledges that (a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents, (b)
neither the Agent nor any Bank has any fiduciary relationship to the Borrower,
the relationship being solely that of debtor and creditor, (c) no joint venture
exists between the Borrower and the Agent or any Bank, and (d) neither the Agent
nor any Bank undertakes any 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
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or supervision of, or information supplied to, the Borrower by the Agent or
any Bank is for the protection of the Banks and neither the Borrower nor any
third party is entitled to rely thereon.
Section 9.17 RELEASE OF LIENS ON EXISTING U.S. BANK DEBT. The Bank
agrees, at the request and sale cost of the Borrower, to release its Liens
securing the Existing U.S. Bank Debt, including the execution of any UCC
termination statements or other releases prepared by the Borrower.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
MARTEN TRANSPORT LTD.
By
Its
Address for Borrower:
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
STATE OF )
) ss.
COUNTY OF )
On this _______ day of ________________, 1998, before me, the
undersigned, a Notary Public, appeared _________________________, who being
by me duly sworn, did say that he is the ____________________ of MARTEN
TRANSPORT LTD. and that the foregoing instrument was signed on behalf of the
corporation by authority of its Board of Directors, and said officer
acknowledged the foregoing instrument to be executed for the purposes therein
stated and as the free act and deed of the corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial
seal the day and year last above written.
---------------------------------------------------------------------------
Notary Public
REVOLVING COMMITMENT U.S. BANK NATIONAL Amount:
ASSOCIATION -------------------
-------------------
$40,000,000 In its individual corporate
capacity and as Agent
By
Its
Address:
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
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Attention: Xxxxxxx X. Xxxxxxx
MPFP 0510
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EXHIBIT 1.1A TO
CREDIT AGREEMENT
REVOLVING NOTE
$40,000,000
October 30, 0000
Xxxxxxxxxxx, Xxxxxxxxx
FOR VALUE RECEIVED, MARTEN TRANSPORT LTD., a Delaware corporation,
hereby promises to pay to the order of U.S. Bank National Association (the
"Bank") at the main office of U.S. Bank National Association 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
Commitment Ending Date, the principal amount of FORTY MILLION AND NO/100
DOLLARS ($40,000,000) 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 one of the Revolving Notes referred to in the Credit
Agreement dated as of October 30, 1998 (as the same may hereafter be from
time to time amended, restated or otherwise modified, the "Credit Agreement")
among the undersigned, the Bank and the other banks named therein. This note
is subject to certain permissive and mandatory prepayments 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.
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
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PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES
APPLICABLE TO NATIONAL BANKS.
MARTEN TRANSPORT LTD.
By
Its
STATE OF )
) ss.
COUNTY OF )
On this _______ day of ________________, 1998, before me, the
undersigned, a Notary Public, appeared _________________________, who being
by me duly sworn, did say that he is the ____________________ of MARTEN
TRANSPORT LTD. and that the foregoing instrument was signed on behalf of the
corporation by authority of its Board of Directors, and said officer
acknowledged the foregoing instrument to be executed for the purposes therein
stated and as the free act and deed of the corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial
seal the day and year last above written.
---------------------------------------------------------------------------
Notary Public
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