Exhibit 10.13
REVOLVING CREDIT AGREEMENT
by and between
NN BALL & ROLLER, INC., as BORROWER
and
FIRST AMERICAN NATIONAL BANK, as LENDER
$25,000,000
JULY 25, 1997
TABLE OF CONTENTS
REVOLVING CREDIT AGREEMENT
ARTICLE I - DEFINITION OF TERMS
Section 1.01. Definitions........................ 1
Section 1.02. Other Definitional Provisions .....7
ARTICLE II - CREDIT FACILITIES
Section 2.01 Revolving Commitments............. 7
Section 2.02 Reduction of Committed Sum........ 7
Section 2.03 Fees.............................. 8
Section 2.04 Voluntary Prepayments ............ 8
Section 2.05 Extension of Commitment Period.... 8
Section 2.06 Use of Proceeds................... 8
ARTICLE III - NOTES AND NOTE PAYMENTS
Section 3.01 Revolving Credit Notes............ 8
Section 3.02 Interest Rates.................... 9
Section 3.03 Calculation of Interest Rates..... 9
Section 3.04 Manner and Application of Payments.9
ARTICLE IV - CONDITIONS PRECEDENT
Section 4.01 Initial Advances.................. 9
(a) Revolving Credit Note............. 9
(b) Opinion of Borrower's Counsel..... 9
(c) Officers' Certificate............. 9
(d) Resolutions of Borrower........... 10
(e) Incumbency Certificate of Borrower.10
(f) Certificates...................... 10
(g) Charter and Bylaws................ 10
(h) Financial Information............ 10
(i) Litigation........................ 10
(j) Insurance......................... 10
(k) Additional Information............ 10
Section 4.02 All Advances.
(a) No Defaults....................... 11
(b) Compliance with Agreement......... 11
(c) No Material Adverse Change........ 11
(d) Representations and Warranties.... 11
(e) Financial Statements.............. 11
(f) Bankruptcy .Proceedings........... 11
ARTICLE V - COLLATERAL ............................... 11
ARTICLE VI - REPRESENTATIONS AND WARRANTIES
Section 6.01 Organization and Good Standing.... 11
Section 6.02 Authorization and Power........... 12
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Section 6.03 No Conflicts or Consents.......... 12
Section 6.04 Enforceable Obligations........... 12
Section 6.05 No Liens.......................... 12
Section 6.06 Financial Condition............... 12
Section 6.07 Full Disclosure................... 12
Section 6.08 No Default........................ 12
Section 6.09 Material Agreements............... 13
Section 6.10 No Litigation..................... 13
Section 6.11 Burdensome Contracts.............. 13
Section 6.12 Regulatory Defects................ 13
Section 6.13 Use of Proceeds; Margin Stock..... 13
Section 6.14 Taxes............................. 13
Section 6.15 Principal Office, Etc............. 13
Section 6.16 ERISA............................. 13
Section 6.17 Compliance with Law............... 14
Section 6.18 Government Regulation............. 14
Section 6.19 Insider........................... 14
Section 6.20 Subsidiaries...................... 14
Section 6.21 Fair Labor Standards Act.......... 14
Section 6.22 Casualties......................... 15
Section 6.23 Investment Company Act........... 15
Section 6.24 Sufficiency of Capital............ 15
Section 6.25 Hazardous Substances.............. 15
Section 6.26 Corporate Name.................... 15
Section 6.28 Survival of Representations and
Warranties...................... 15
ARTICLE VII - AFFIRMATIVE COVENANTS
Section 7.01 Financial Statements, Reports and
Documents....................... 16
(a)Quarterly Statements................... 16
(b)Annual Statements...................... 16
(c)Audit Reports.......................... 16
(d)Other Reports.......................... 16
(e)Compliance Certificate................. 17
(f)Accountants Certificates............... 17
(g)Other Information...................... 17
Section 7.02 Payment of Taxes and Other
Indebtedness.................... 17
Section 7.03 Maintenance of Existence and
Rights; Conduct of Business......17
Section 7.04 Notice of Default................. 17
Section 7.05 Other Notices..................... 17
Section 7.06 Compliance with Loan Documents.... 18
Section 7.07 Compliance with Material Agreements18
Section 7.08 Operations and Properties ........ 18
Section 7.09 Books and Records; Access......... 18
Section 7.10 Compliance with Law............... 18
Section 7.11 Insurance......................... 18
Section 7.12 Authorizations and Approvals...... 18
Section 7.13 ERISA Compliance.................. 18
Section 7.14 Further Assurances................ 19
Section 7.15 Indemnity by Borrower............. 19
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ARTICLE VIII - NEGATIVE COVENANT
Section 8.01 Limitation on Indebtedness........ 20
Section 8.02 Negative Pledge................... 20
Section 8.03 Restrictions on Dividends......... 20
Section 8.04 Limitation on Investments......... 20
Section 8.05 Alteration of Material Agreements. 20
Section 8.06 Certain Transactions.............. 20
Section 8.07 Issuance of Shares................ 20
Section 8.08 Limitation on Sale of Properties.. 21
Section 8.09 Name, Fiscal Year and Accounting
Method.......................... 21
Section 8.10 Earnings ......................... 21
Section 8.11 Liquidation, Mergers,
Consolidations and Dispositions
of Substantial Assets........... 21
Section 8.12 Lines of Business................. 21
Section 8.13 No Amendments..................... 21
Section 8.14 Purchase of Substantial Assets.... 21
ARTICLE IX - EVENTS OF DEFAULT
Section 9.01 Events of Default................ 21
Section 9.02 Remedies Upon Event of Default.... 23
ARTICLE X - MISCELLANEOUS
Section 10.01 Modification...................... 23
Section 10.02 Accounting Terms and Reports...... 23
Section 10.03 Waiver............................ 23
Section 10.04 Payment of Expenses.............. 24
Section 10.05 Notices.......................... 24
Section 10.06 Governing Law.................... 24
Section 10.07 Waiver of Jury Trial; Choice of
Forum; Consent to Service of
Process and Jurisdiction........ 24
Section 10.08 Invalid Provisions................ 25
Section 10.09 Maximum Interest Rate............ 25
Section 10.10 Confidentiality................... 26
Section 10.11 Nonliability of Lender............ 26
Section 10.12 Offset............................ 26
Section 10.13 Binding Effect.................... 26
Section 10.14 Entirety...........................26
Section 10.15 Headings.......................... 26
Section 10.16 Survival.......................... 26
Section 10.17 No Third Party Beneficiary........ 26
Section 10.18 Multiple Counterparts............. 27
Exhibit A ............................................ 29
Exhibit B............................................. 31
Exhibit C............................................. 32
Exhibit D............................................. 33
Exhibit E ............................................ 34
Exhibit F ............................................ 35
Exhibit G ............................................ 36
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REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT (the "Agreement") is hereby made
and entered into on this the 25th day of July, 1997 by and between NN BALL &
ROLLER, INC., a Delaware corporation (hereinafter called "Borrower"), and FIRST
AMERICAN NATIONAL BANK (hereinafter called "Lender").
W I T N E S S E T H:
WHEREAS, Borrower has requested that Lender provide Borrower with
a revolving credit facility; and
WHEREAS, Lender is willing to provide such a facility to Borrower
upon the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises herein
contained and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITION OF TERMS
SECTION 1.01. Definitions. For the purposes of this Agreement,
unless the context otherwise requires, the following terms shall have the
respective meanings assigned to them in this Article I or in the Section or
recital referred to below:
"Accounts" shall have the meaning assigned to such term in the
Uniform Commercial Code.
"Advance" shall mean a loan made from time to time by Lender to
Borrower pursuant to the Loan Documents; "Advances" shall mean all of such
loans.
"Affiliate" of any Person shall mean any other Person directly or
indirectly, controlling, controlled by, or under common control with, such
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of Voting Shares or
by contract or otherwise.
"Agreement" shall have the meaning assigned to such term in the
preamble hereof.
"Borrower" shall mean NN Ball & Roller, Inc., a Delaware
corporation and any permitted successors and assigns.
"Business Day" shall mean any day except a Saturday, Sunday or
other day on which Lender is normally and customarily closed.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commitment" shall mean the obligation of Lender to extend credit
to Borrower under this Agreement in an aggregate principal amount equal to, but
not to exceed, Lender's Committed Sum.
"Commitment Period" shall mean the period beginning on the date
hereof and ending on the earlier of (i) the Commitment Termination Date, or (ii)
the date on which Lender terminates its Commitments after the occurrence of an
Event of Default.
"Committed Sum" shall mean the sum of exactly Twenty Five Million
Dollars ($25,000,000).
"Commitment Termination Date" shall mean June 30, 2000 or, if
such date is not a Business Day, the Business Day next preceding such date.
"Current Assets" shall mean, as of any date, the current assets
which would be reflected on the balance sheet of Borrower prepared as of such
date in accordance with Generally Accepted Accounting Principles, but excluding
(i) all Accounts in respect of products, goods and/or services which have not
been paid within the ninetieth (90) day following the last date upon which such
Account was timely payable under Company's trade terms with such customer, and
(ii) intangible assets.
"Current Liabilities" shall mean, as of any date, the current
liabilities which would be reflected on the balance sheet of Borrower prepared
as of such date in accordance with Generally Accepted Accounting Principles.
"Controlled Group" shall mean (i) the controlled group of
corporations as defined in Code Section 1563, or (ii) the group of trades or
businesses under common control as defined in Code Section 414(c) of which
Borrower is a part or may become a part.
"Debtor Laws" shall mean all applicable liquidation,
conservatorship, bankruptcy, moratorium, arrangement, receivership, insolvency,
reorganization or similar laws from time to time in effect affecting the rights
of creditors generally.
"Default" shall mean any of the events specified in ARTICLE IX of
this Agreement, regardless of whether there shall have occurred any passage of
time or giving of notice or both that would be necessary in order to constitute
such event an Event of Default.
"Dividends" shall mean (i) cash distributions or any other
distributions on, or in respect of, any class of capital stock of Borrower,
except for distributions made solely in shares of stock of the same class, and
(ii) any and all funds, cash or other payments made in respect of the
redemption, repurchase or acquisition of such stock, unless such stock shall be
redeemed or acquired through the exchange of such stock with stock of the same
class.
"Dollars" and the sign "$" shall refer to currency of the United
States of America.
"Earnings Before Interest Taxes Depreciation and Amortization"
shall mean for any period, the sum of (i) the income (or deficit) of Borrower
before provision for income taxes for such period, plus (ii) interest expense
for such period, plus (iii) all amounts in respect of depreciation and
amortization for such period.
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"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, together with all regulations issued pursuant thereto.
"Event of Default" shall have the meaning assigned to such term
in SECTION 9.01 of this Agreement.
"Fed Funds" shall mean the weighted average of rates on trades
through New York, New York brokers as published by Federal Reserves H.15
Statistical Release.
"Generally Accepted Accounting Principles" shall mean those
generally accepted accounting principles and practices which are recognized as
such by the American Institute of Certified Public Accountants acting through
its Accounting Principles Board or by the Financial Accounting Standards Board
or through other appropriate boards or committees thereof and which are
consistently applied for all periods after the date hereof so as to properly
reflect the financial condition, and the results of operations and changes in
financial position, of Borrower, except that any accounting principle or
practice required to be changed by the said Accounting Principles Board or
Financial Accounting Standards Board (or other appropriate board or committee of
the said Boards) in order to continue as a generally accepted accounting
principle or practice may so be changed. In the event of a change in Generally
Accepted Accounting Principles, Lender and Borrower will thereafter negotiate in
good faith to revise any covenants of this Agreement affected thereby in order
to make such covenants consistent with Generally Accepted Accounting Principles
then in effect.
"Governmental Authority" shall mean any government (or any
political subdivision or jurisdiction thereof), court, bureau, agency or other
governmental authority having jurisdiction over Borrower or any of its business,
operations or properties.
"Indebtedness" shall mean (i) indebtedness for borrowed money or
for the deferred purchase price of property or services (other than trade
accounts payable in the ordinary course of business which are not past due),
(ii) financial obligations evidenced by bonds, debentures, notes or other
similar instruments, (iii) financial obligations as lessee under leases which
shall have been or should be, in accordance with General Accepted Accounting
Principles, recorded as capital leases, and (iv) obligations under direct or
indirect guarantees in respect of indebtedness or financial obligations of
others of the kinds referred to in clauses (i) through (iii) above.
"Interest Period(s)" shall mean, with respect to each Advance,
the period commencing on the date of such Advance and ending on the first
Interest Payment Date thereafter; and, thereafter, each period commencing on the
last day of the immediately preceding Interest Period and ending on the first
Interest Payment Date thereafter. Borrower may request a LIBOR Advance(s) for
Interest Periods of one (1), two (2), three (3), or six (6) months.
"Interest Payment Date(s)" shall mean the first day of each
calendar month for a Fed Funds Advance(s) and the end of the corresponding
Interest Period for LIBOR Advances.
"LIBOR" shall mean, for each Interest Period, the rate per annum
offered to the Lender (at approximately 11:00 A.M. London time, on the date two
Business Days in London prior to the first day of such Interest Period) by prime
banks in the London Interbank Market for deposits of Dollars for a period equal
to the length of such Interest Period and in an amount of the Advances which
have been made (or will be made) by Lender to Borrower hereunder and
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are scheduled to be outstanding during such interest period. Each
determination of the LIBOR by Lender shall, in the absence of manifest error,
be conclusive and binding.
"Lender" shall mean First American National Bank.
"Lien" shall mean any lien, mortgage, security interest, tax
lien, pledge, encumbrance, conditional sale or title retention arrangement, or
any other interest in property designed to secure the repayment of Indebtedness,
whether arising by agreement or under any statute or law, or otherwise.
"Loan Documents" shall mean this Agreement, the Revolving Credit
Note (including any renewals, extensions and refundings thereof), and any
agreements or documents (and with respect to this Agreement, and such other
agreements and documents, any amendments or supplements thereto or modifications
thereof) executed or delivered pursuant to the terms of this Agreement.
"Material Adverse Effect" means any (i) material adverse effect
whatsoever upon the validity, performance or enforceability of any Loan
Documents, (ii) material adverse effect upon the financial condition or business
operations of Borrower, or (iii) material adverse effect upon the ability of
Borrower to fulfill its obligations under the Loan Documents.
"Maximum Rate" shall mean, on any day, the highest nonusurious
rate of interest (if any) permitted by applicable law on such day that at any
time, or from time to time, may be contracted for, taken, reserved, charged or
received on the Indebtedness evidenced by the Revolving Credit Note under the
laws which are presently in effect of the United States of America and the State
of Tennessee applicable to the holders of the Revolving Credit Note and such
Indebtedness or, to the extent permitted by law, under such applicable laws for
the United States of America and the State of Tennessee which may hereafter be
in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"Net Worth" shall mean, as of any date, the total shareholders'
equity (including capital stock, additional paid-in capital and retained
earnings after deducting treasury stock) which would appear on the balance sheet
of Borrower and prepared as of such date in accordance with Generally Accepted
Accounting Principles, less the aggregate book value of intangible assets
(deferred assets, other than prepaid insurance and prepaid taxes; patents,
copyrights, trademarks, tradenames, franchises, goodwill, experimental expenses
and other similar assets which would be classified as intangible assets on the
balance sheet of Borrower, prepared in accordance with Generally Accepted
Accounting Principles) shown on such balance sheet.
"Notice of Borrowing" shall mean any telephonic or other
instructions received from any person purporting to be an officer of Borrower or
other authorized person.
"Obligation" shall mean:
(i) all present and future indebtedness, obligations and
liabilities of Borrower to Lender arising pursuant to this Agreement, regardless
of whether such indebtedness, obligations and liabilities are direct, indirect,
fixed, contingent, joint, several, or joint and several;
(ii) all present and future indebtedness, obligations and
liabilities of Borrower to Lender arising pursuant to or represented by the
Revolving Credit Note and all interest accruing thereon, and attorneys' fees
incurred in the enforcement or collection thereof;
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(iii) all present and future indebtedness, obligations and
liabilities of Borrower evidenced by or arising pursuant to any of the Loan
Documents; and
(iv) all renewals, extensions and modifications of the
indebtedness referred to in the foregoing clauses, or any part thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, and
any successor to all or any of the Pension Benefit Guaranty Corporation's
functions under ERISA.
"Permitted Liens" shall mean: (i) Liens (if any) granted to
Lender to secure any Obligation, (ii) Liens described on EXHIBIT G attached
hereto, (iii) pledges or deposits made to secure payment of worker's
compensation insurance (or to participate in any fund in connection with
worker's compensation insurance), unemployment insurance, pensions or social
security programs, (iv) Liens imposed by mandatory provisions of law such as for
materialmen's, mechanics', warehousemen's and other like Liens arising in the
ordinary course of business, securing Indebtedness whose payment is not yet due,
(v) Liens for taxes, assessments and governmental charges or levies imposed upon
a Person or upon such Person's income or profits or property, if the same are
not yet due and payable or if the same are being contested in good faith and as
to which adequate cash reserves have been provided, (vi) Liens arising from good
faith deposits in connection with tenders, leases, real estate bids or contracts
(other than contracts involving the borrowing of money), pledges or deposits to
secure public or statutory obligations and deposits to secure (or in lieu of)
surety, stay, appeal or customs bonds and deposits to secure the payment of
taxes, assessments, customs duties or other similar charges, (vii) encumbrances
consisting of zoning restrictions, easements, or other restrictions on the use
of real property, provided that such items do not impair the use of such
property for the purposes intended, and none of which is violated by existing or
proposed structures or land use, or (viii) purchase money security interests
relating to equipment, goods or inventory purchased by Borrower.
"Person" shall include an individual, a corporation (including
without limitation Borrower), a joint venture, a general or limited partnership,
a trust, a limited liability company, an unincorporated organization or a
government or any agency or political subdivision thereof.
"Plan" shall mean an employee benefit plan or other plan
maintained by Borrower for employees of Borrower and covered by Title IV of
ERISA, or subject to the minimum funding standards under Section 412 of the Code
of 1954, as amended.
"Process Agent" shall mean Xxxxxxxx X. Xxxx whose address is 000
Xxxxxxxxx Xxxx, Xxxxx, Xxxxxxxxx 00000.
"Regulation D" shall mean Regulation D of the Board of Governors
of the Federal Reserve System 12 C.F.R. Part 204, or any successor or other
regulation relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Regulation G" shall mean Regulation G of the Board of Governors
of the Federal Reserve System, 12 C.F.R. Part 207, or any successor or other
regulation relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Regulation U" shall mean Regulation U promulgated by the Board
of Governors of the Federal Reserve System, 12 C.F.R. Part 221, or any successor
or other regulation hereafter
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promulgated by said Board to replace the prior Regulation U and having
substantially the same function.
"Regulation X" shall mean Regulation X promulgated by the Board
of Governors of the Federal Reserve System, 12 C.F.R. Part 224, or any successor
or other regulation hereafter promulgated by said Board to replace the prior
Regulation X and having substantially the same function.
"Reportable Event" shall have the meaning assigned to such term
in Title IV of ERISA.
"Revolving Credit Note" shall mean the note executed by Borrower
and delivered pursuant to the terms of this Agreement, together with any
renewals, extensions or modifications thereof.
"Solvent" means, with respect to any Person on a particular date,
that on such date (i) the fair value of the property and assets of such Person
is greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (ii) the present fair salable value of
the property and assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (iii) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (iv) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (v) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such Person is
engaged. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"Temporary Cash Investment" shall mean any investment (i) in
direct obligations of the United States of America or any agency thereof, or
obligations fully guaranteed by the United States of America or any agency
thereof, (ii) commercial paper rated in the highest grade by two (2) or more
national credit rating agencies, and (iii) time deposits with, and certificates
of deposit and banker's acceptances issued by, any Lender or any United States
bank having capital surplus and undivided profits aggregating at least
$1,000,000,000.
"Voting Shares" of any corporation shall mean shares of any class
or classes (however designated) having ordinary voting power for the election of
at least a majority of the members of the Board of Directors (or other governing
bodies) of such corporation, other than shares having such power only by reason
of the happening of a contingency.
SECTION 1.02. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the
above-defined meanings when used in the Revolving Credit Note or any Loan
Documents, certificate, report or other document made or delivered pursuant to
this Loan Agreement, unless the context therein shall otherwise require.
(b) Defined terms used herein in the singular shall import the
plural and vice-versa.
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(c) The words "hereof," "herein," "hereunder" and similar terms
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement.
ARTICLE II
CREDIT FACILITIES
SECTION 2.01. Revolving Commitments. Subject to the terms and
conditions of this Agreement (and in reliance upon the representations and
warranties made hereunder), Lender agrees to lend to Borrower on a revolving
basis in one or more Advances from time to time during the Commitment Period an
aggregate principal amount equal to, but not to exceed, the Committed Sum. In
the event that the outstanding principal of Advances shall at any time exceed
the limitations herein, all such Advances shall nonetheless be entitled to all
the benefits of this Agreement. Within the limits of this Section 2.01 and
subject to the other terms and conditions of this Agreement, during the
Commitment Period Borrower may borrow, repay and reborrow in accordance with the
terms and conditions of this Agreement.
SECTION 2.02. Manner of Borrowing.
(a) Authorization to make Advances. Lender is authorized to make
the Advances based upon any Notices of Borrowing or, at the discretion of
Lender, if such Advances are necessary to satisfy any Obligation. All Notices
of Borrowing hereunder shall specify the date on which the requested Advance is
to be made (which day shall be a Business Day), the amount of the requested
Advance(s) and whether the request is for a Fed Funds Advance(s) or a LIBOR
Advance(s). Any Notice of Borrowing received after 11:00 A.M. Kingsport,
Tennessee time on any day shall be deemed to have been made as of the opening of
business on the immediately following Business Day. All Advances under this
Agreement shall be conclusively presumed to have been made to, and at the
request of and for the benefit of, Borrower when deposited to the credit of
Borrower or otherwise disbursed or established in accordance with the
instructions of Borrower or in accordance with the terms and conditions of this
Agreement.
(b) Notice Irrevocable. Each Notice of Borrowing shall be
irrevocable and binding on Borrower, and Borrower shall indemnify Lender against
any cost, loss or expense incurred by Lender as a result of any failure by
Borrower to fulfill, on or before the date specified for an Advance, the
conditions to such Advance set forth herein, including without limitation, any
cost, loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by Lender to fund the Advance to be made by
Lender.
(c) Funding. After receiving a Notice of Borrowing in the manner
provided herein, Lender shall, before 2:00 p.m. Kingsport, Tennessee time on the
date an Advance(s) is requested as specified in a Notice of Borrowing, deposit
in the account(s) designated by Borrower, pursuant to the terms and conditions
of this Agreement, such Advance(s) in immediately available funds.
Notwithstanding anything herein to the contrary, the permitted minimum Fed Funds
Advance(s) shall be in conjunction with "Sweep" account arrangements; and the
permitted minimum LIBOR Advance(s) shall be Five Hundred Thousand Dollars
($500,000.00) and multiples of Five Hundred Thousand Dollars ($500,000.00) with
three (3) Business Days' prior written notice. Further, no more than four (4)
LIBOR Advance(s) may be outstanding at any time.
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SECTION 2.03. Fees. Borrower shall pay the following fees to
Lender:
An unused credit fee for the Commitment Period computed at a rate
per annum (based on a year of 365 or 366 days, as the case may be) equal to One
Hundred Twenty Five Thousandths of One Percent (.125%) on the average daily
unborrowed amount of Lender's Committed Sum in effect during the period for
which payment is made. Such commitment fees shall be payable quarterly in
arrears on the last day of each March, June, September and December during the
Commitment Period, and on the date of termination of the Commitment Period.
SECTION 2.04. Voluntary Prepayments:
(a) LIBOR Advances may be prepaid at any time on three (3)
Business Days prior written notice. All payments of LIBOR Advances shall only
be permitted in minimum levels of Five Hundred Thousand Dollars ($500,000.00)
and in multiples of Five Hundred Thousand Dollars ($500,000.00). Borrower will
reimburse and compensate Lender for any and all funding losses when LIBOR
Advances are prepaid prior to the end of their respective Interest Periods.
(b) All payments of Fed Funds Advances shall be permitted in any
amounts in accordance with "Sweep" account arrangements.
SECTION 2.05. Extension of Commitment Period. The Commitment
Period shall expire automatically on the Commitment Termination Date; provided,
however, Borrower, beginning on June 30, 1998, shall, subject to the approval of
Lender, have an ability, annually, to extend the Commitment Termination Date by
one (1) year. The right of Lender not to extend the Commitment Period shall be
unconditional and within its sole discretion, notwithstanding that no Event of
Default exists under this Agreement and the Loan Documents and regardless of the
adequacy of the Collateral for Borrower's performance of its obligations
hereunder and thereunder.
SECTION 2.06. Use of Proceeds. Subject to this Agreement and the
Loan Documents, the proceeds of each Advance shall be used for working capital
and general corporate purposes of Borrower.
ARTICLE III
NOTES AND NOTE PAYMENTS
SECTION 3.01. Revolving Credit Note. The Advances made under
SECTION 2.01 hereof by Lender shall be evidenced by a promissory note
("Revolving Credit Note") executed by Borrower, which Revolving Credit Note
shall (i) be dated the date hereof, (ii) be in the amount of Lender's Committed
Sum, (iii) be payable to the order of Lender at its office in Kingsport,
Tennessee, (iv) bear interest in accordance with SECTION 3.02 hereof, and (v) be
in the form of EXHIBIT A attached hereto, which is incorporated fully herein by
this reference, with blanks appropriately completed in conformity herewith.
Notwithstanding the principal amount of the Revolving Credit Note as stated on
the face thereof, the amount of principal actually owing on such Revolving
Credit Note at any given time shall be the aggregate of the principal amount of
all Advances theretofore made to Borrower hereunder, less all payments of
principal theretofore actually received hereunder by Lender.
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SECTION 3.02. Interest Rates. Interest shall accrue on average
daily outstanding principal balance of Advances at a rate per annum equal to the
sum of LIBOR plus Sixty Five Hundredths of One Percent (.65%) (6.34 as of
5/30/97) or the Fed Funds effective rate plus One and One Half Percent (1.5%)
(7.06 as of 5/30/97) for such day. Interest shall be paid by Borrower on each
Interest Payment Date and shall be paid by Lender charging Borrower's Advance
account. The final payment of all accrued and unpaid interest shall be due and
payable on the date the outstanding principal amount of the Advances is paid or
due and payable in full. Following and during the continuance of an Event of
Default, the Advances shall, at Lender's option, bear interest on the
outstanding principal amount thereof, for each day from the date of the Event of
Default until the earlier of the date of the Advances are paid, or the Event of
Default is cured at a rate equal to the Maximum Rate.
SECTION 3.03. Calculation of Interest Rates. Interest hereunder
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but excluding the last day).
SECTION 3.04. Manner and Application of Payments. Absent a
Default or an Event of Default, the outstanding principal amount of the Advances
(together with accrued and unpaid interest and expenses and any other
obligations that may be due to the Lender under this Agreement or the Loan
Documents) shall be due and payable by Borrower to Lender on the earlier of (i)
the Commitment Termination Date; or (ii) the termination of this Agreement by
Lender or Borrower in accordance with terms of this Agreement. All payments by
Borrower shall be made to Lender at its address set forth herein in lawful money
of the United States of America and in immediately available funds. Whenever
any payment to be made hereunder shall be due on a day which is not a Business
Day, such payment shall be made on the first Business Day thereafter, and such
extension of time shall in such case be included in the computation of interest
hereunder. As payments become due and payable, Lender may and is hereby
authorized by Borrower, as set forth in SECTION 2.03, to charge Borrower's
account in a manner to effect any such payments that are due.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.01. Initial Advances. The obligation of Lender to make
its initial Advance hereunder is subject to the condition precedent that, on or
before the date of such Advance, Lender shall have received from Borrower the
following in form and substance satisfactory to Lender:
(a) Revolving Credit Note. A duly executed Revolving Credit Note,
payable to the order of Lender, in the form of EXHIBIT A.
(b) Opinion of Borrower's Counsel. A favorable opinion
of Xxxxxxxxx & Xxxxxxx, legal counsel for Borrower.
(c) Officers' Certificate. A certificate signed by a duly
authorized officer of Borrower, stating that (to the knowledge of such officer,
after reasonable and due investigation and review of matters pertinent to the
subject matter of such certificate): (i) all of the representations and
warranties contained in ARTICLE VI hereof and the Loan Documents are true and
correct in all material respects as of the date of the Advance; and (ii) no
event has
9
occurred and is continuing, or would result from the Advance, which
constitutes a Default or an Event of Default.
(d) Resolutions of Borrower. Resolutions of Borrower approving
the execution, delivery and performance of this Agreement, the Revolving Credit
Note, the Loan Documents and the transactions contemplated herein and therein,
duly adopted by Borrower's Board of Directors and accompanied by a certificate
of the Secretary or Assistant Secretary of Borrower stating that such
resolutions are true and correct, have not been altered or repealed and are in
full force and effect.
(e) Incumbency Certificate of Borrower. A signed certificate of
the Secretary or Assistant Secretary of Borrower which shall certify the names
of the officers of Borrower authorized to sign each of the Loan Documents to be
executed by such Person and the other documents or certificates to be delivered
by such Person pursuant to the Loan Documents. Lender may conclusively rely on
the certificate of Borrower until Lender shall receive a further certificate of
the Secretary or Assistant Secretary of Borrower canceling or amending the prior
certificate, provided such certificate does not retroactively void the prior
certificate.
(f) Certificates. Certificates of good standing (or other similar
instruments) for Borrower by the Secretary of State of the state of
incorporation of Borrower, and certificates of qualification and good standing
(or other similar instruments) for Borrower issued by the Secretary of State of
each of the states wherein Borrower is qualified to do business as a foreign
corporation, each dated no more than thirty (30) days prior to the execution of
this Agreement.
(g) Charter and Bylaws. A copy of the charter/articles of
incorporation of Borrower, and all amendments thereto, certified by the
Secretary or Assistant Secretary of Borrower, and dated as of the date of the
execution of this Agreement and a copy of the bylaws of Borrower, and all
amendments thereto, certified by the Secretary or Assistant Secretary of
Borrower, as being true, correct and complete as of the date of such
certification.
(h) Financial Information. Copies of the financial statements
referred to in SECTION 7.01.
(i) Litigation. A certificate signed by a duly authorized officer
of Borrower stating that no litigation, investigation or proceeding before or by
an arbitrator or Governmental Authority is continuing or, to the officer's
knowledge, threatened against Borrower or to the officer's knowledge continuing
or threatened against any of its officers, directors or affiliates (i) with
respect to this Agreement, the Revolving Credit Note, any other Loan Documents
or any of the transactions contemplated hereby or thereby, or (ii) which could
have a Material Adverse Effect. Lender shall also receivea summary of all
litigation in which Borrower or any of its officers, directors or affiliates is
involved.
(j) Insurance. Evidence satisfactory to Lender that Borrower has
obtained and have in full force the insurance policies required by this
Agreement.
(k) Additional Information. Such other information and documents
as may reasonably be required by Lender and Lender's legal counsel.
SECTION 4.02. All Advances. The obligation of Lender to make any
Advance under this Agreement (including the initial Advance) shall be subject to
the following conditions precedent:
10
(a) No Defaults. As of the date of the making of such Advance
there exists no Default or Event of Default.
(b) Compliance with Agreement. Borrower shall have performed and
complied in all material respects with all agreements and conditions contained
herein and in each of the Loan Documents which are required to be performed or
complied with by Borrower before or on the date of such Advance.
(c) No Material Adverse Change. As of the date of making such
Advance, no change that would cause a Material Adverse Effect has occurred since
the date of the financial statements referenced in SECTION 6.06.
(d) Representations and Warranties. The representations and
warranties contained in ARTICLE VI hereof and in each of the Loan Documents
shall be true in all material respects on the date of making of such Advance,
with the same force and effect as though made on and as of that date (excluding,
however, any representations or warranties which are made only as of a specified
date).
(e) Financial Statements. The most recent financial statements of
Borrower delivered to Lender pursuant to SECTION 7.01 are true and correct in
all material respects, fairly represent the financial condition of Borrower and
have been prepared in accordance with Generally Accepted Accounting Principles
applied on a basis consistent with that of prior periods, provided that interim
statements shall be subject to year end audit adjustments; as of the date of
such financial statements, there were no obligations, liabilities or
Indebtedness (including contingent and indirect liabilities and obligations or
unusual forward or long-term commitments) of Borrower which were (separately or
in the aggregate) material and required to be included thereon in accordance
with Generally Accepted Accounting Principles and not reflected in such
financial statements.
(f) Bankruptcy Proceedings. No proceeding or case under the
United States Bankruptcy Code shall have been commenced by or against Borrower.
ARTICLE V
COLLATERAL
The Advance(s) made pursuant to this Agreement shall be
unsecured.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
To induce Lender to make Advances hereunder, Borrower represents
and warrants to Lender that:
SECTION 6.01. Organization and Good Standing. Borrower is a
corporation duly organized and existing in good standing under the laws of the
state of its incorporation, is duly qualified as a foreign corporation and in
good standing in all states where such qualification is
11
required and has the corporate power and authority to own its properties and
assets and to transact the business in which it is engaged and is or will be
qualified in those states wherein qualification is required in the future.
SECTION 6.02. Authorization and Power. Borrower has the corporate
power and requisite authority to execute, deliver and perform the Loan Documents
to be executed by it. Borrower is duly authorized to, and has taken all
corporate action necessary to authorize it to, execute, deliver and perform the
Loan Documents executed by it. Borrower is and will continue to be duly
authorized to perform the Loan Documents executed by it.
SECTION 6.03. No Conflicts or Consents. Neither the execution and
delivery of the Loan Documents, nor the consummation of any of the transactions
therein contemplated, nor compliance with the terms and provisions thereof, will
contravene or materially conflict with any provision of law, statute or
regulation to which Borrower is subject or any judgment, license, order or
permit applicable to Borrower, or any indenture, loan agreement, mortgage, deed
of trust, or other material agreement or instrument to which Borrower is a party
or by which Borrower may be bound, or to which Borrower may be subject, or
violate any provision of the charter or bylaws of Borrower. No consent,
approval, authorization or order of any court or governmental authority or third
party is required in connection with the execution and delivery by Borrower of
the Loan Documents or to consummate the transactions contemplated hereby or
thereby.
SECTION 6.04. Enforceable Obligations. The Loan Documents have
been duly executed and delivered by Borrower and are the legal and binding
obligations of Borrower, enforceable in accordance with their respective terms,
except as limited by Debtor Laws and general principles of equity.
SECTION 6.05. No Liens. Except for Permitted Liens, all of the
properties and assets owned by Borrower are free and clear of all Liens and
other material adverse claims of any nature, and Borrower has good and
marketable title to such properties and assets.
SECTION 6.06. Financial Condition. Borrower has delivered to
Lender copies of the consolidated and consolidating balance sheet of Borrower as
of December 31, 1996, and the related consolidated and consolidating statements
of income, stockholders' equity and changes in financial position for the year
ended such date, certified by independent certified public accountants; such
financial statements are true and correct in all material respects, fairly
represent the financial condition of Borrower as of such date and have been
prepared in accordance with Generally Accepted Accounting Principles applied on
a basis consistent with that of prior periods; no changes having a Material
Adverse Effect have occurred since the date of such financial statements.
SECTION 6.07. Full Disclosure. There is no fact within Borrower's
knowledge that Borrower has not disclosed to Lender which would have any
significant probably of creating a Material Adverse Effect. This Agreement, the
other Loan Documents, and certificates and financial and other statements
furnished to Lender by or on behalf of Borrower in connection with transactions
contemplated hereby, when read, together, do not contain any untrue statement of
a material fact or omit to state any material fact necessary to keep the
statements contained herein or therein from being misleading.
SECTION 6.08. No Default. No event has occurred and is continuing
which constitutes a Default or an Event of Default.
12
Section 6.09. Material Agreements. Borrower is not in default in
any material respect under any contract, lease, loan agreement, indenture,
mortgage, security agreement or other material agreement or obligation to which
it is a party or by which any of its properties is bound excluding such defaults
which would have not have a Material Adverse Effect.
SECTION 6.10. No Litigation. Except as disclosed on EXHIBIT B
(which is incorporated fully herein by this reference), there are no actions,
suits or legal, equitable, arbitration or administrative proceedings pending, or
to the knowledge of Borrower threatened, against Borrower that could, if
adversely determined, have a Material Adverse Effect. There has been no change
since the date of this Agreement in the status of any of the actions, suits,
investigations, litigation or proceedings referred to in the litigation
disclosed to Lender pursuant to EXHIBIT B that is materially adverse to Borrower
or to any transactions contemplated by any Loan Document.
SECTION 6.11. Burdensome Contracts. Borrower is not a party to,
or bound by, any contract which is a burdensome contract having a Material
Adverse Effect.
SECTION 6.12. Regulatory Defects. As of the date hereof,
Borrower has advised Lender, in writing, of all regulatory defects of which
Borrower has actual knowledge.
SECTION 6.13. Use of Proceeds; Margin Stock. The proceeds of the
Advances hereunder will be used by Borrower solely for the purposes herein
specified. None of such proceeds will be used for the purpose of purchasing or
carrying any "margin stock" as defined in Regulation U, Regulation X, or
Regulation G, or for the purpose of reducing or retiring any Indebtedness which
was originally incurred to purchase or carry a "margin stock" or for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of such Regulation U, Regulation X, or Regulation G. Borrower is not
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stocks. Neither Borrower nor any Person acting on behalf of
Borrower has taken or will take any action which might cause the Advances or any
of the other Loan Documents, including this Agreement, to violate Regulation U,
Regulation X, or Regulation G or any other regulations of the Board of Governors
of the Federal Reserve System or to violate Section 8 of the Securities Exchange
Act of 1934 or any rule or regulation thereunder, in each case as now in effect
or as the same may hereinafter be in effect. Borrower owns no "margin stock."
SECTION 6.14 Taxes. All tax returns required to be filed by
Borrower in any jurisdiction have been filed and all taxes (including mortgage
recording taxes), assessments, fees and other governmental charges required to
be paid by Borrower have been paid or appropriate reserves have been established
on Borrower's books with respect thereto. To Borrower's knowledge, there is no
proposed tax deficiency assessment against Borrower and there is no basis for
such assessment.
SECTION 6.15. Principal Office, Etc. The principal office, chief
executive office and principal place of business of Borrower is at 000 Xxxxxxxxx
Xxxx, Xxxxx, Xxxxxxxxx 00000, Borrower maintains its principal records and books
at such address.
SECTION 6.16. ERISA. (a) No Reportable Event has occurred and is
continuing with respect to any Plan; (b) PBGC has not instituted proceedings to
terminate any Plan; (c) neither the Borrower, any member of the Controlled
Group, nor any duly-appointed administrator of a Plan (i) has incurred any
liability to PBGC with respect to any Plan other than for premiums
13
not yet due or payable, or (ii) has instituted or intends to institute
proceedings to terminate any Plan under Sections 4041 or 4041A of ERISA or
withdraw from any Multi-Employer Pension Plan (as that term is defined in
Section 3(37) of ERISA); (d) each Plan of Borrower has been maintained and
funded in all material respects in accordance with its terms and with all
provisions of ERISA and the Code applicable thereto; (e) Borrower and all
members of any Controlled Group have complied with all applicable minimum
funding requirements of ERISA and the Code with respect to each Plan; (f) no
member of any Controlled Group has been required to contribute to a Multi-
Employer Pension Plan since September 2, 1974 except as set forth on EXHIBIT
C (which is incorporated fully herein by this reference); (g) there are no
unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA)
with respect to any Plan of Borrower or any member of the Controlled Group
which pose a risk of causing a lien to be created in the assets of Borrower,
and (h) no material prohibited transaction under the Code or ERISA has
occurred with respect to any Plan of Borrower or a member of the Controlled
Group.
SECTION 6.17. Compliance with Law. Borrower is in compliance with
all laws, rules, regulations, orders and decrees which are applicable to
Borrower or its properties, excluding such violations which would not have a
Material Adverse Effect.
SECTION 6.18. Government Regulation. Borrower is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Investment Company Act of 1940, the Interstate Commerce Act (as
any of the preceding acts have been amended), or any other law (other than
Regulation X) which regulates the incurring by Borrower of Indebtedness,
including but not limited to laws relating to common contract carriers or the
sale of electricity, gas, steam, water, or other public utility services.
SECTION 6.19. Insider. Borrower is not, and no Person having
"control" (as that term is defined in 12 U.S.C. Section 375(b)(5) or in
regulations promulgated pursuant thereto) of Borrower is, an "executive
officer," "director," or "principal shareholder" (as those terms are defined in
12 U.S.C. Section 375(b) or in regulations promulgated pursuant thereto) of
Lender, of a bank holding company of which Lender may be a subsidiary, or of any
subsidiary of a bank holding company of which Lender may be a subsidiary, or of
any bank at which Lender maintains a "correspondent account" (as such term is
defined in such statute or regulations), or of any bank which maintains a
correspondent account with Lender.
SECTION 6.20. Subsidiaries. Set forth on EXHIBIT D hereto is a
complete and accurate list of all subsidiaries as of the date of this Agreement,
showing as of such date (as to each such subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of capital stock outstanding
on the date of this Agreement and the direct owner of the outstanding shares of
each such class owned and the jurisdictions in which such subsidiary is
qualified to do business as a foreign corporation. All of the outstanding
capital stock of all subsidiaries has been validly issued, is fully paid and
non-assessable and is owned by Borrower or a Subsidiary free and clear of all
Liens other than Permitted Liens.
SECTION 6.21. Fair Labor Standards Act. Borrower has complied in
all material respects with, and will continue to comply in all material respects
with, the provisions of the Fair Labor Standards Act of 1938, 29 U.S.C. Section
200, et seq., as amended from time to time (the "FSLA"), including specifically,
but without limitation, 29 U.S.C. Section 21 5(a). This representation and
warranty, and each re-confirmation hereof, shall constitute written assurance
from Borrower, given as of the date hereof and as of the date of each
re-confirmation, that Borrower
14
has complied in all material respects with the requirements of the FSLA, in
general, and Section 15(a)(1), 29 U.S.C. Section 15(a)(1), thereof, in
particular.
SECTION 6.22. Casualties. Neither the business nor the properties
of Borrower are affected by any environmental hazard, fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or other casualty, which could have a Material Adverse
Effect.
SECTION 6.23. Investment Company Act. Borrower is not an
"investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, and is not controlled by such a
company.
SECTION 6.24. Sufficiency of Capital. Borrower is, and after
consummation of this Agreement and after giving effect to all Indebtedness
incurred and Liens created by Borrower in connection herewith will be, Solvent.
SECTION 6.25. Hazardous Substances. Except as disclosed on
EXHIBIT E (which is incorporated fully herein by this reference) and for the
presence of such hazardous substances, petroleum products, or underground
storage tanks the clean-up of which would not have a Material Adverse Effect,
the real properties owned by Borrower are free from "hazardous substances" as
defined by the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. Sections 9601 et seq., as amended, and the regulations
promulgated pursuant thereto, and no portion of such property is subject to
federal, state or local regulation or liability because of the presence of
stored, leaked or spilled petroleum products, waste materials or debris, "PCB's"
or PCB items (as defined in 40 C.F.R. Section 761.3), underground storage tanks,
"asbestos" (as defined in 40 C.F.R. Section 763.63) or the past or present
accumulation, spillage or leakage of any such substance.
SECTION 6.26. Corporate Name. Borrower has not, during the
preceding five (5) years, been known as or used any other corporate, fictitious
or tradenames except as disclosed on EXHIBIT F (which is incorporated fully
herein by this reference).
SECTION 6.27. Representations and Warranties. Each Notice of
Borrowing shall constitute, without the necessity of specifically containing a
written statement, a representation and warranty by Borrower that no Default or
Event of Default exists and that all representations and warranties contained in
this ARTICLE VI or in any other Loan Document are true and correct in all
material respects on and as of the date the requested Advance is to be made
(excluding any representations or warranties made as of a specific date).
SECTION 6.28. Survival of Representations and Warranties. All
representations and warranties by Borrower herein shall survive delivery of the
Revolving Credit Note and the making of the Advance, and any investigation at
any time made by or on behalf of Lender shall not diminish Lender's right to
rely thereon.
15
ARTICLE VII
AFFIRMATIVE COVENANTS
So long as Lender has any commitment to make Advances hereunder,
and until payment in full of the Revolving Credit Note and the performance of
the Obligations, Borrower agrees that:
SECTION 7.01. Financial Statements, Reports and Documents.
Borrower shall deliver to Lender each of the following:
(a) Quarterly Statements. As soon as available, and in any event
within forty-five (45) days after the end of each quarterly fiscal period
(except the last) of each fiscal year of Borrower, copies of the quarterly Form
10-Q Statements consolidated and consolidating balance sheet of Borrower as of
the end of such quarterly fiscal period, and statements of income and retained
earnings and changes in financial position of Borrower for that quarterly fiscal
period and for the portion of the fiscal year ending with such period, in each
case setting forth in comparative form the figures of the corresponding period
of the preceding fiscal year, all in reasonable detail, and certified by the
chief financial officer of Borrower as being true and correct in all material
respects and as having been prepared in accordance with Generally Accepted
Accounting Principals, subject to year-end audit adjustments;
(b) Annual Statements. As soon as available, and in any event
within ninety days (90) days after the close of each fiscal year of Borrower,
copies of the consolidated and consolidating balance sheet of Borrower as of the
close of such fiscal year and statements of income and retained earnings and
changes in financial position of Borrower for such fiscal year, in each case
setting forth in comparative form the figures for the preceding fiscal year, all
in reasonable detail and accompanied by an opinion thereon (which shall not be
qualified by reason of any limitation imposed by Borrower) of Price Waterhouse,
LLP or of other independent public accountants of recognized national standing
selected by Borrower to the effect that such consolidated financial statements
have been prepared in accordance with Generally Accepted Accounting Principles
consistently maintained and applied (except for changes in which such
accountants concur) and that the examination of such accounts in connection with
such financial statements has been made in accordance with generally accepted
auditing standards and, accordingly, includes such tests of the accounting
records and such other auditing procedures as were considered necessary in the
circumstances;
(c) Audit Reports. Promptly upon receipt thereof, one copy of
each written report submitted to Borrower by independent accountants in any
annual, quarterly or special audit made, it being understood and agreed that all
audit reports which are furnished to Lender pursuant to this ARTICLE VII shall
be treated as confidential, but nothing herein contained shall limit or impair
Lender's right to disclose such reports to any appropriate Governmental
Authority to the extent required by law, or to use such information to enforce
compliance with the terms and conditions of this Agreement, or to take any
lawful action which Lender reasonably deems necessary to protect its interests
under this Agreement;
(d) SEC Other Reports. Promptly upon its becoming available, one
copy of each financial statement, report, notice or proxy statement sent by
Borrower to stockholders generally and of each regular or periodic report,
registration statement or prospectus filed by Borrower with any securities
exchange or the Securities and Exchange Commission or any
16
successor agency, and of any order issued by any Governmental Authority in
any proceeding to which Borrower is a party;
(e) Compliance Certificate. Within forty-five (45) days after
the end of each fiscal quarter of Borrower hereafter, a certificate executed by
the chief financial officer or chief executive officer of Borrower, stating that
a review of the activities of Borrower during such fiscal quarter has been made
under his supervision and that, to such officer's knowledge, Borrower has
observed, performed and fulfilled in all material respects each and every
obligation and covenant contained herein and no Default has occurred and is
continuing or, if any Default shall have occurred and is continuing, specifying
the nature and status thereof;
(f) Annual Forecasts. As soon as available, and in any event
within ninety (90) days after the close of each fiscal year of Borrower, annual
forecasts for Borrower, including without limitation, a balance sheets, income
statements, and statement of cash flows - all in detail reasonably satisfactory
to Lender.
(g) Other Information. Such other information concerning the
business, properties or financial condition of Borrower as Lender shall
reasonably from time to time request.
SECTION 7.02. Payment of Taxes and Other Indebtedness. Borrower
shall pay and discharge (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits, or upon any property
belonging to it, before delinquent, (ii) all lawful claims (including claims for
labor, materials and supplies), which, if unpaid, might give rise to a Lien upon
any of its property, and (iii) all of its other Indebtedness, except as
prohibited hereunder; provided, however, that Borrower shall not be required to
pay any such tax, assessment, charge, levy or indebtedness if and so long as the
amount, applicability or validity thereof shall currently be contested in good
faith by appropriate proceedings and appropriate accruals and cash reserves
therefor have been established in accordance with Generally Accepted Accounting
Principles.
SECTION 7.03. Maintenance of Existence and Rights; Conduct of
Business. Borrower shall preserve and maintain its corporate existence and all
of its rights, privileges and franchises necessary or desirable in the normal
conduct of its business, and conduct its business consistent with good business
practices.
SECTION 7.04. Notice of Default. Borrower shall furnish to Lender
promptly upon becoming aware of the existence of any condition or event which
constitutes a Default, written notice specifying the nature and period of
existence thereof and the action which Borrower is taking or proposes to take
with respect thereto.
SECTION 7.05. Other Notices. Borrower shall promptly notify
Lender of (i) any material adverse change in its financial condition or its
business, (ii) any default under any material agreement, contract or other
instrument to which it is a party or by which any of its properties are bound,
which could have a Material Adverse Effect, or any acceleration of the maturity
of any Indebtedness owing by Borrower, (iii) any claim against or affecting
Borrower or any of its properties which could have a Material Adverse Effect and
(iv) the commencement of, and any material determination in, any litigation with
any third party or any proceeding before any Governmental Authority affecting
Borrower, which could have a Material Adverse Effect
17
SECTION 7.06. Compliance with Loan Documents. Borrower shall
promptly comply in all material respects with any and all covenants and
provisions of the Loan Documents executed by it.
SECTION 7.07. Compliance with Material Agreements. Borrower shall
comply with all material agreements, indentures, mortgages or documents binding
on it or affecting its properties or business, excluding such defaults which
would not have a Material Adverse Effect.
SECTION 7.08. Operations and Properties. Borrower shall keep in
good working order and condition, ordinary wear and tear excepted, all of its
assets and properties which are necessary to the conduct of its business.
SECTION 7.09. Books and Records; Access. Borrower, upon
reasonable notice, shall give any representative of Lender reasonable access
during all business hours to, and permit such representative to examine, copy or
make excerpts from, any and all books, records and documents in the possession
of Borrower and relating to its affairs and which are material to the
transactions hereunder, and to inspect any of the properties of Borrower;
provided that any such inspection shall be conducted in such a manner as to not
unreasonably interfere with Borrower's business operations. Borrower shall
maintain complete and accurate books and records of its transactions in
accordance with good accounting practices.
SECTION 7.10. Compliance with Law. Borrower shall comply with all
applicable laws, rules, regulations, and all orders of any Governmental
Authority applicable to it or any of its property, business operations or
transactions, a breach of which could have a Material Adverse Effect.
SECTION 7.11. Insurance. Borrower shall maintain worker's
compensation insurance, liability insurance and insurance on its properties,
assets and business, now owned or hereafter acquired, against such casualties,
risks and contingencies, and in such types and amounts, as are consistent with
customary practices and standards of companies engaged in similar businesses.
SECTION 7.12. Authorizations and Approvals. Borrower shall
promptly obtain, from time to time at its own expense, all such governmental
licenses, authorizations, consents, permits and approvals as may be required to
enable it to comply with its obligations hereunder and under the other Loan
Documents.
SECTION 7.13. ERISA Compliance. Borrower shall (i) at all times,
make prompt payment of all contributions required under all Plans and required
to meet the minimum funding standard set forth in ERISA with respect to its
Plans, (ii) within thirty (30) days after the filing thereof, furnish to Lender
copies of each annual report/return (Form 5500 Series), as well as all schedules
and attachments required to be filed with the Department of Labor and/or the
Internal Revenue Service pursuant to ERISA, and the regulations promulgated
thereunder, in connection with each of its Plans for each Plan year, (iii)
notify Lender promptly of any fact, including, but not limited to, any
Reportable Event arising in connection with any of its Plans, which might
constitute grounds for termination thereof by the PBGC or for the appointment by
the appropriate United States District Court of a trustee to administer such
Plan, together with a statement, if requested by Lender, as to the reason
therefor and the action, if any, proposed to be taken with respect thereto, and
(iv) furnish to Lender, upon its
18
request, such additional information concerning any of its Plans as may be
reasonably requested.
SECTION 7.14. Further Assurances. Borrower shall make, execute or
endorse, and acknowledge and deliver or file or cause the same to be done, all
such vouchers, invoices, notices, certifications and additional agreements, or
other assurances, and take any and all such other action, as Lender may, from
time to time, deem reasonably necessary or proper in connection with any of the
Loan Documents, or the obligations of Borrower thereunder.
SECTION 7.15. Indemnity by Borrower. Borrower shall indemnify,
save, and hold harmless Lender and its directors, officers, agents, attorneys,
and employees (collectively, the "Indemnitees") from and against: (i) any and
all claims, demands, actions, or causes of action that are asserted against any
Indemnitee by any Person if the claim, demand, action, or cause of action
directly or indirectly relates to a claim, demand, action, or cause of action
that the Person asserts or may assert against Borrower, any Affiliate of
Borrower or any officer, director or shareholder of Borrower, (ii) any and all
claims, demands, actions or causes of action that are asserted against any
Indemnitee if the claim, demand, action or cause of action directly or
indirectly relates to the Commitment, the use of proceeds of the Advances, or
the relationship of Borrower and Lender under this Agreement or any transaction
contemplated pursuant to this Agreement, (iii) any administrative or
investigative proceeding by any Governmental Authority directly or indirectly
related to a claim, demand, action or cause of action described in clauses (i)
or (ii) above, and (iv) any and all liabilities, losses, costs, or expenses
(including attorneys' fees and disbursements) that any Indemnitee suffers or
incurs as a result of any of the foregoing; provided, however, that Borrower
shall have no obligation under this Section to Lender with respect to any of the
foregoing arising out of the gross negligence or willful misconduct of Lender or
the breach by Lender of this Agreement or from the transfer or disposition of
the Revolving Credit Note, or any interest therein, by Lender. If any claim,
demand, action or cause of action is asserted against any Indemnitee, such
Indemnitee shall promptly notify Borrower, but the failure to so promptly notify
Borrower shall not affect Borrower's obligations under this Section unless such
failure materially prejudices Borrower's right to participate in the contest of
such claim, demand, action or cause of action, as hereinafter provided. If
requested by Borrower in writing and so long as no Default or Event of Default
shall have occurred and be continuing, such Indemnitee shall in good faith
contest the validity, applicability and amount of such claim, demand, action or
cause of action and shall permit Borrower to participate in such contest. Any
Indemnitee that proposes to settle or compromise any claim or proceeding for
which Borrower may be liable for payment of indemnity hereunder shall give
Borrower written notice of the terms of such proposed settlement or compromise
reasonably in advance of settling or compromising such claim or proceeding and
shall obtain Borrower's concurrence thereto which concurrence shall not be
unreasonably withheld. Each Indemnitee is authorized to employ counsel in
enforcing its rights hereunder and in defending against any claim, demand,
action, or cause of action covered by this Section; provided, however, that each
Indemnitee shall endeavor, but shall not be obligated, in connection with any
matter covered by this Section which also involves other Indemnitees, to use
reasonable efforts to avoid unnecessary duplication of effort by counsel for all
Indemnitees. Any obligation or liability of Borrower to any Indemnitee under
this Section shall survive the expiration or termination of this Agreement and
the repayment of the Obligations.
19
ARTICLE VIII
NEGATIVE COVENANT
So long as Lender has any commitment to make Advances hereunder,
and until payment in full of the Revolving Credit Note and the performance of
the Obligation, Borrower agrees that:
SECTION 8.01. Limitation on Indebtedness. Without Lender's prior
written consent, Borrower shall not incur, create, contract, waive, assume, have
outstanding, guarantee or otherwise be or become, directly or indirectly, liable
in respect of any Indebtedness, except (i) Indebtedness arising out of this
Agreement, (ii) Indebtedness secured by the Permitted Liens, (iii) current
liabilities for taxes and assessments incurred in the ordinary course of
business, (iv) Indebtedness in respect of current accounts payable or accrued
(other than for borrowed funds or purchase money obligations) and incurred in
the ordinary course of business, provided that all such liabilities, accounts
and claims shall be promptly paid and discharged when due or in conformity with
customary trade terms, and (v) Indebtedness of Borrower as reflected in the
audited consolidated financial statement of Borrower as of December 31, 1996.
SECTION 8.02. Negative Pledge. Borrower shall not create, incur,
permit or suffer to exist any Lien upon any of its property or assets, now owned
or hereafter acquired, except for Permitted Liens.
SECTION 8.03. Restrictions on Dividends. If an Event of Default
exists, or such action would cause an Event of Default, Borrower shall not
directly or indirectly declare any Dividend provided that a Default or Event of
Default shall not limit Borrower from paying a Dividend declared when such Event
of Default did not exist.
SECTION 8.04. Limitation on Investments. Borrower shall not make
or have outstanding any passive investments except for Temporary Cash
Investments and such other "cash equivalent" investments as Lender may from time
to time approve.
SECTION 8.05. Certain Transactions. Except for Borrower's home
equity loan policy for relocated employees (provided such loan policy does not
collectively exceed five hundred thousand dollars ($500,000.00) in any fiscal
year), Borrower shall not enter into any transaction with, or pay any management
fees to, any Affiliate, management personnel, employees or shareholders;
provided, however, that Borrower may enter into such transactions upon terms not
less favorable to Borrower than would be obtainable at the time in comparable
transactions of Borrower in arms - length dealings with Persons other than the
said parties.
SECTION 8.06. Limitation on Sale of Properties. Borrower shall
not (i) sell, assign, convey, exchange, lease or otherwise dispose of any of its
properties, rights, assets or business, whether now owned or hereafter acquired,
except in the ordinary course of its business and for a fair consideration, or
(ii) sell, assign or discount any Accounts.
SECTION 8.07. Name, Fiscal Year and Accounting Method. Borrower
shall not change its name, fiscal year or method of accounting except as
required by Generally Accepted Accounting Principles; provided, however,
Borrower may change its name if Borrower has given Lender sixty (60) days prior
written notice of such name change.
20
SECTION 8.8. Earnings. Borrower's earning shall not reduce by
more than fifty percent (50%) of Borrower's earnings in the Borrower's
immediately preceding fiscal year - to be calculated on an annual basis.
SECTION 8.9. Liquidation, Mergers, Consolidations, Purchase and
Dispositions Purchase and of Substantial Assets. If an Event of Default exists,
or such action would cause an Event of Default, Borrower shall not dissolve or
liquidate, or become a party to any merger or consolidation, or acquire by
purchase, lease or otherwise all or substantially all of the assets or capital
stock of any Person, or sell, transfer, lease or otherwise dispose of all or any
substantial part of its property or assets or business without the prior written
consent of Lender, which consent may be withheld in the sole and absolute
discretion of Lender.
SECTION 8.10. Lines of Business. Borrower shall not discontinue
any of its existing lines of business.
SECTION 8.11. No Amendments. Borrower shall not amend its
certificate of incorporation or bylaws; provided, however, Borrower may amend
its certificate of incorporation or bylaws if Borrower has given Lender sixty
(60) days prior written notice of such amendment.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.01. Events of Default. An "Event of Default" shall
exist if any one or more of the following events (herein collectively called
"Events of Default") shall occur and be continuing fifteen (15) days after
Lender provides Borrower written notice thereof:
(a) Borrower shall fail to pay when due any principal of, or
interest on, the Revolving Credit Note or shall fail to pay when due any fee,
expense or other payment required hereunder.
(b) any representation or warranty made under this Agreement, or
any of the other Loan Documents, or in any certificate or statement furnished or
made to Lender pursuant hereto or in connection herewith or with the Advances
hereunder, shall prove to be untrue or inaccurate in any material respect as of
the date on which such representation or warranty is made;
(c) material default shall occur in the performance of any of the
covenants or agreements of Borrower hereunder or in any of the other Loan
Documents;
(d) default shall occur in the payment of any material
Indebtedness of Borrower (other than the Obligation) or default shall occur in
respect of any note, loan agreement or credit agreement relating to any such
Indebtedness and such default shall continue for more than the period of grace,
if any, specified therein; or any such Indebtedness shall become due before its
stated maturity by acceleration of the maturity thereof or shall become due by
its terms and shall not be promptly paid or extended;
(e) any of the Loan Documents shall cease to be legal, valid and
binding agreements enforceable against the Borrower in accordance with the
respective terms thereof or shall in any way be terminated or become or be
declared ineffective or inoperative or shall in any way
21
whatsoever cease to give or provide the respective rights, titles, interests,
remedies, powers or privileges intended to be created thereby;
(f) Borrower shall (i) apply for or consent to the appointment of
a receiver, trustee, custodian, intervenor or liquidator of itself or of all or
a substantial part of its assets, (ii) file a voluntary petition in bankruptcy,
admit in writing that it is unable to pay its debts as they become due or
generally not pay its debts as they become due, (iii) make a general assignment
for the benefit of creditors, (iv) file a petition or answer seeking
reorganization of an arrangement with creditors or to take advantage of any
bankruptcy or insolvency laws, (v) file an answer admitting the material
allegations of, or consent to, or default in answering, a petition filed against
it in any bankruptcy, reorganization or insolvency proceeding, or (vi) take
corporate action for the purpose of effecting any of the foregoing;
(g) an involuntary petition or complaint shall be filed against
Borrower seeking bankruptcy or reorganization of it or the appointment of a
receiver, custodian, trustee, intervenor or liquidator of it, or all or
substantially all of its assets, and such petition or complaint shall not have
been dismissed within sixty (60) days of the filing thereof; or an order, order
for relief, judgment or decree shall be entered by any court of competent
jurisdiction or other competent authority approving a petition or complaint
seeking reorganization of Borrower or appointing a receiver, custodian, trustee,
intervenor or liquidator of it, or of all or substantially all of its assets;
(h) any final judgment for the payment of money in excess of the
sum of one million five hundred thousand dollars ($1,500,000) shall be rendered
against Borrower, or any other judgment having a Material Adverse Effect.
(i) both the following events shall occur: (i) either (x)
proceedings shall have been instituted to terminate, or a notice of termination
shall have been filed with respect to, any Plan (other than a Multi-Employer
Pension Plan as that term is defined in Section 3(37) of ERISA) by Borrower, any
member of the Controlled Group, PBGC or any representative of any thereof, or
any such Plan shall be terminated, in each case under Section 4041 or 4042 of
ERISA, or (y) a Reportable Event, the occurrence of which would cause the
imposition of a lien under Section 4068 of ERISA, shall have occurred with
respect to any Plan (other than a Multi-Employer Pension Plan as that term is
defined in Section 3(37) of ERISA) and be continuing for a period of sixty (60)
days; and (ii) the sum of the estimated liability to PBGC under Section 4062 of
ERISA and the currently payable obligations of Borrower to fund liabilities (in
excess of amounts required to be paid to satisfy the minimum funding standard of
Section 412 of the Code) under the Plan or Plans subject to such event shall
exceed ten percent (10%) of Net Worth at such time;
(j) any or all of the following events shall occur with respect
to any Multi-Employer Pension Plan (as that term is defined in Section 3(37) of
ERISA) to which Borrower contributes or contributed on behalf of its employees:
(i) Borrower incurs a withdrawal liability under Section 4201 of ERISA; or (ii)
any such plan is "in reorganization" as that term as that term is defined in
Section 4241 of ERISA; or (iii) any such Plan is terminated under Section 4041A
of ERISA, and Lender determines in good faith that the aggregate liability
likely to be incurred by Borrower as a result of all or any of the events
specified in Subsections (i), (ii) and (iii) above occurring, shall have a
Material Adverse Effect; or
(k) there shall occur any change in the condition (financial or
otherwise) of Borrower which, in the reasonable opinion of Lender, has a
Material Adverse Effect.
22
SECTION 9.02. Remedies Upon Event of Default. If an Event of
Default shall have occurred and be continuing, then Lender may exercise any one
or more of the following rights and remedies, and any other remedies provided in
any of the Loan Documents, as Lender in its sole discretion, may deem necessary
or appropriate, in each case upon notice to Borrower: (i) terminate Lender's
commitment to lend hereunder, (ii) declare the principal of, and all interest
then accrued on, the Revolving Credit Note and any other liabilities hereunder
to be forthwith due and payable, whereupon the same shall forthwith become due
and payable without presentment, demand, protest, notice of default, notice of
acceleration or of intention to accelerate or other notice of any kind, all of
which Borrower hereby expressly waives, anything contained herein or in the
Revolving Credit Note to the contrary notwithstanding, (iii) reduce any claim to
judgment, and/or (iv) without notice of default or demand, pursue and enforce
any of Lender's rights and remedies under the Loan Documents, or otherwise
provided under or pursuant to any applicable law or agreement; provided,
however, that if any Event of Default specified in SECTION 9.01 (f) and (g)
shall occur, the principal of, and all interest on, the Revolving Credit Note
and other liabilities hereunder shall thereupon become due and payable
concurrently therewith, and Lender's obligations to lend shall immediately
terminate hereunder, without any further action by Lender and without
presentment, demand, protest, notice of default, notice of acceleration or of
intention to accelerate or other notice of any kind, all of which Borrower
hereby expressly waives.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Modification. All modifications, consents,
amendments or waivers of any provision of any Loan Document, or consent to any
departure by Borrower therefrom, shall be effective only if the same shall be in
writing and concurred in by Lender and then shall be effective only in the
specific instance and for the purpose for which given.
SECTION 10.02. Accounting Terms and Reports. All accounting terms
not specifically defined in this Agreement shall be construed in accordance with
Generally Accepted Accounting Principles consistently applied on the basis used
by Borrower in prior years. All financial reports furnished by Borrower to
Lender pursuant to this Agreement shall be prepared in such form and such detail
as shall be reasonably satisfactory to Lender, shall be prepared on the same
basis as those prepared by Borrower in prior years and shall be the same
financial reports as those furnished to Borrower's officers and directors.
SECTION 10.03. Waiver. No failure to exercise, and no delay in
exercising, on the part of Lender, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right. The rights of
Lender hereunder and under the Loan Documents shall be in addition to all other
rights provided by law and/or equity. No modification or waiver of any provision
of this Agreement, the Revolving Credit Note or any Loan Documents, nor consent
to departure therefrom, shall be effective unless in writing and no such consent
or waiver shall extend beyond the particular case and purpose involved. No
notice or demand given in any case shall constitute a waiver of the right to
take other action in the same, similar or other instances without such notice or
demand.
23
SECTION 10.04. Payment of Expenses. Borrower agrees to pay all
costs and expenses of Lender (including, without limitation, the reasonable
attorneys' fees of Lender's legal counsel) incurred by Lender in connection with
the preservation and enforcement of Lender's rights under this Agreement, the
Revolving Credit Note, and/or the other Loan Documents, and all reasonable costs
and expenses of Lender (including without limitation the reasonable fees and
expenses of Lenders' legal counsel) in connection with the negotiation,
preparation, execution and delivery of this Agreement, the Revolving Credit
Note, and the other Loan Documents and any and all amendments, modifications and
supplements thereof or thereto.
SECTION 10.05. Notices. Except for telephonic notices permitted
herein, any notices or other communications required or permitted to be given by
this Agreement or any other documents and instruments referred to herein must be
(i) given in writing and personally delivered or mailed by prepaid certified or
registered mail, or (ii) made by facsimile delivered or transmitted, to the
party to whom such notice of communication is directed, to the address of such
party as follows:
(a) Borrower: NN Ball & Roller, Inc.
000 Xxxxxxxxx Xxxx
Xxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxxx X., Xxxx, Vice President
and Chief Financial Officer
Facsimile No.: 423/743-8870
(b) Lender: First American National Bank
0000 Xx. Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Senior Vice
President
Facsimile No.: 423/229-0333
Any such notice or other communication shall be deemed to have been given
on the day it is received or personally delivered as aforesaid or, if
transmitted by facsimile, on the day that such notice is transmitted as
aforesaid provided such transmission occurs prior to 5:00 p.m.; provided,
however, that any telephonic or other notice received by Lender after 11:00 A.M.
time on any day from Borrower pursuant to SECTION 2.02 (with respect to a Notice
of Borrowing) shall be deemed for the purposes of such Section to have been
given by Borrower on the next succeeding Business Day. Any party may change its
address for purposes of this Agreement by giving notice of such change to the
other parties pursuant to this Section 10.05.
SECTION 10.06. Governing Law. This Agreement has been prepared,
is being executed and delivered, and is intended to be performed in the State of
Tennessee and the substantive laws of such state (without reference to any
conflict of laws provisions) and the applicable federal laws of the United
States of America shall govern the validity, construction, enforcement and
interpretation of this Agreement and all of the other Loan Documents.
SECTION 10.07. Waiver of Jury Trial; Choice of Forum; Consent to
Service of Process and Jurisdiction. Borrower hereby irrevocably and
unconditionally waives all right to trial by jury in any action, proceeding, or
counterclaim arising out of or related to this Agreement, the
24
Advances or any other document or instrument to which Borrower and Lender are
parties or any of the transactions contemplated hereby or thereby. Any suit,
action or proceeding against Borrower with respect to this Agreement, the
Revolving Credit Note or any judgment entered by any court in respect
thereof, may be brought in the courts of the State of Tennessee, County of
Xxxxxxxx, or in the United States District Court for the Eastern District of
Tennessee, in Greeneville, Tennessee and Borrower hereby submits to the
non-exclusive jurisdiction of such courts for the purpose of any such suit,
action or proceeding. Borrower hereby irrevocably consents to the service of
process in any suit, action or proceeding in said court by the mailing
thereof by Lender registered or certified mail, postage prepaid, to
Borrower's address set forth in SECTION 10.05 hereof. Borrower hereby
irrevocably waives any objections which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating
to this Agreement or Revolving Credit Note brought in the said courts, and
hereby further irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in any inconvenient
forum.
SECTION 10.08. Invalid Provisions. If any provision of any Loan
Document is held to be illegal, invalid or unenforceable under present or future
laws during the term of this Agreement, such provision shall be fully severable;
such Loan Document shall be construed and enforced as if such illegal, invalid
or unenforceable provision had never comprised a part of such Loan Document; and
the remaining provisions of such Loan Document shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance from such Loan Document. Furthermore, in lieu of
each such illegal, invalid or unenforceable provision shall be added as part of
such Loan Document a provision mutually agreeable to Borrower and Lender as
similar in terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable. The effective date of the added
provision shall be the date upon which the prior provision was held to be
illegal, invalid or unenforceable.
SECTION 10.9. Maximum Interest Rate. Regardless of any provision
contained in any of the Loan Documents, Lender shall never be entitled to
receive, collect or apply as interest on the Revolving Credit Note any amount in
excess of interest calculated at the Maximum Rate, and, in the event that Lender
ever receives, collects or applies as interest any such excess, the amount which
would be excessive interest shall be deemed to be a partial prepayment of
principal and treated hereunder as such; and, if the principal amount of the
Obligation is paid in full, any remaining excess shall forthwith be paid to
Borrower. In determining whether or not the interest paid or payable under any
specific contingency exceeds interest calculated at the Maximum Rate, Borrower
and Lender shall, to the maximum extent permitted under applicable law, (i)
characterize any nonprincipal payment as an expense, fee or premium rather than
as interest; (ii) exclude voluntary prepayments and the effects thereof; and
(iii) amortize, pro rate, allocate and spread, in equal parts, the total amount
of interest throughout the entire contemplated term of the Revolving Credit
Note; provided that, if the Revolving Credit Note are paid and performed in full
prior to the end of the full contemplated term thereof, and if the interest
received for the actual period of existence thereof exceeds interest calculated
at the Maximum Rate, Lender shall refund to Borrower the amount of such excess
or credit the amount of such excess against the principal amount of the
Revolving Credit Note and, in such event, Lender shall not be subject to any
penalties provided by any laws for contracting for, charging, taking, reserving
or receiving interest in excess of interest calculated at the Maximum Rate.
SECTION 10.10. Confidentiality. Lender agrees to hold any
information which it may receive from Borrower pursuant to this Agreement in
confidence, except for disclosure to (i)
25
legal counsel, accountants, and other professional advisors, provided each
such person agrees to be bound to a confidentiality covenant substantially
similar to this Section 10.10 in favor of Borrower, (ii) regulatory officials
only to the extent requested, (iii) as required by law or legal process or in
connection with any legal proceeding, and (iv) to another financial
institution in connection with a disposition or proposed disposition of a
Lender's interests hereunder or under the Revolving Credit Note. In the event
Lender shall be required to disclose any information to any regulatory
authority or in connection with any lawsuit, governmental investigation or
proceeding,Lender shall endeavor to maintain the confidential nature of such
information.
SECTION 10.11. Nonliability of Lender. The relationship between
Borrower and Lender is, and shall at all times remain, solely that of borrower
and lender, and Lender does not undertake nor assume any responsibility or duty
to Borrower to review, inspect, supervise, pass judgment upon, or inform
Borrower of any matter in connection with any phase of Borrower's business,
operations, or condition, financial or otherwise. Borrower shall rely entirely
upon its own judgment with respect to such matters, and any review, inspection,
supervision, exercise of judgment, or information supplied to Borrower by Lender
in connection with any such matter is for the protection of Lender, and neither
Borrower nor any third party is entitled to rely thereon.
SECTION 10.12. Offset. Borrower hereby grants to Lender the right
of offset, to secure repayment of the Revolving Credit Note, upon any and all
moneys, securities or other property of Borrower and the proceeds therefrom, now
or hereafter held or received by or in transit to Lender, or any of its agents,
from or for the account of Borrower, whether for safe keeping, custody, pledge,
transmission, collection or otherwise, and also upon any and all deposits
(general or special) and credits of Borrower, and any and all claims of Borrower
against Lender at any time existing.
SECTION 10.13. Binding Effect. The Loan Documents shall be
binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns; provided, however, that neither Borrower nor
Lender may without the prior written consent of the other assign any rights,
powers, duties or obligations thereunder. Any assignment in violation of this
Section shall be void.
SECTION 10.14. Entirety. The Loan Documents embody the entire
agreement between the parties and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof and thereof.
SECTION 10.15. Headings. Section headings are for convenience of
reference only and shall in no way affect the interpretation of this Agreement.
SECTION 10.16. Survival. All representations and warranties made
by Borrower herein shall survive delivery of the Revolving Credit Note, the
making of the Advances and the closing of any transactions herein contemplated.
SECTION 10.17. No Third Party Beneficiary. The parties do not
intend the benefits of this Agreement to inure to any third party, nor shall
this Agreement be construed to make or render Lender liable to any materialman,
supplier, contractor, subcontractor, purchaser or lessee of any property owned
by Borrower, or for debts or claims accruing to any such persons against
Borrower. Notwithstanding anything contained herein or in the Revolving Credit
Note, or in any other Loan Document, or any conduct or course of conduct by any
or all of the parties
26
hereto, before or after signing this Agreement nor any other Loan Document
shall be construed as creating any right, claim or cause of action against
Lender, or any of their officers, directors, agents or employees, in favor of
any materialman, supplier, contractor, subcontractor, purchaser or lessee of
any property owned by Borrower, nor to any other person or entity other than
Borrower.
SECTION 10.18. Multiple Counterparts. This Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same agreement, and any of the parties hereto may execute
this Agreement by signing any such counterpart.
IN WITNESS WHEREOF, the undersigned have executed, or caused to
be executed, this Agreement as of the day and year first above written.
BORROWER:
NN BALL & ROLLER, INC.
By:
----------------------------------
(SEAL) Xxxxxxxx X. Xxxx,Vice President
Attest:
--------------------------------------
Xxxxxxx X. Xxxxx, Assistant Secretary
LENDER:
FIRST AMERICAN NATIONAL BANK
By:
------------------------------------
Xxxxx X. Xxxxxx, Senior Vice
President
00
XXXXX XX XXXXXXXXX
XXXXXX XX XXXXXXXX
Xx this 25th day of July, 1997, before me, Xxxxxxx X. Xxxxx, a
Notary Public in and for said State, appeared Xxxxxxxx X. Xxxx, to me
personally known, who, being duly sworn, did say that he is the Vice
President of NN Ball & Roller, Inc., a Delaware corporation, the corporation
named in and which executed the within instrument, and that said instrument
was signed on behalf of said corporation; and saidRoderick X. Xxxx
acknowledged said instrument to be the free act and deed of said corporation.
----------------------------------
Xxxxxxx X. Xxxxx, Notary Public
Commission expires: 7/20/99
28
EXHIBIT A
REVOLVING CREDIT NOTE
$25,000,000 July 25, 1997
Xxxxxxxx County, Tennessee
FOR VALUE RECEIVED, the undersigned, NN BALL & ROLLER, INC. a Delaware
corporation (the "Borrower"), promises to pay to the order of FIRST AMERICAN
NATIONAL BANK, (the "Lender"), at its principal office at 4105 Ft. Xxxxx Drive,
Kingsport, Tennessee, or at such other place as the holder from time to time may
designate in writing, the principal sum of TWENTY FIVE MILLION DOLLARS
($25,000,000), or the outstanding principal balance thereof (collectively and
separately referred to herein sometimes as the "Loan") in lawful money of the
United States of America with interest thereon computed on the unpaid principal
balance, at a rate of LIBOR plus Sixty Five Hundredths of One Percent (.65%)
(6.34 as of 5/30/97) OR at Borrower's option, the Fed Funds effective rate
plus One and One Half Percent (1.5%) (7.06 as of 5/30/97) (all interest being
computed on the basis of the actual number of days elapsed over a year of 360
days). Lender shall attempt to notify Borrower of its determination of the
LIBOR as soon as practicable following such determination. The principal and
interest on the outstanding principal balance shall be due and payable as
follows:
(a) interest, computed as aforesaid, shall be due and payable on
each Interest Payment Date and at maturity; and
(b) the entire unpaid principal balance and any accrued interest
unpaid of this Note shall be due and payable in full on the date of
termination of the Commitment Period.
In the event of an Event of Default, and this Note is placed in the hands of any
attorney for collection, or a suit is filed hereon, or if the proceedings are
held in bankruptcy, receivership, through the reorganization of Borrower, or any
surety of Borrower, or other legal or judicial proceedings for the collection
hereof, Borrower agrees to pay to the owner and holder of this Note all costs of
collection, including reasonable attorneys' fees.
The Borrower and all endorsers and signers hereof, and each of them, expressly
waive presentment for payment, notice of nonpayment, protest, notice of protest,
bringing of suit, and diligence in taking any action to claim the amounts owing
hereunder and are and shall be jointly and severally, directly and primarily,
liable for the amount of all sums owing and to be owing hereon and agree that
this Note, or any payment hereunder, may be extended from time to time without
affecting such liability.
During the existence of any Event of Default, Lender or other owner and holder
hereof is expressly authorized to apply all payments made on this Note to the
payment of such part of any delinquency as it may elect.
The remedies of the Lender hereof as provided herein or in the Revolving Credit
Agreement, dated July 25, 1997, between Borrower and the Lender (the "Loan
Agreement") shall be cumulative and concurrent, and may be pursued singularly,
successively or together, at the sole discretion of the Lender hereof, and may
be exercised as often as occasion therefor shall arise. No act or omission of
the Lender, including specifically any failure to exercise any right, remedy or
recourse shall be deemed to be a waiver or release of the same, such waiver or
release to be effected only through a written document
29
executed by the Lender and then only to the extent specifically recited
therein. A waiver or release with reference to any one event shall not be
construed as continuing, as a bar to, or as a waiver or release of, any
subsequent right, remedy or recourse as to a subsequent event.
Notwithstanding anything herein to the contrary, in no event shall interest
payable hereunder be in excess of the Maximum Rate allowed by applicable law.
Time is of the essence of this Note.
This Note is governed by and subject to the terms and provisions of the Loan
Agreement, to which reference is hereby made for a statement of the
circumstances under which this Note is subject to prepayment and under which its
due date may be accelerated. Capitalized terms used and not otherwise defined
in this Note shall have the respective meanings assigned to them in the Loan
Agreement.
This Note and the instruments securing it shall be governed by, and construed
under, the laws of the State of Tennessee.
The provisions hereof shall be binding upon the parties , their successors and
permitted assigns as set forth in the Loan Agreement. The provisions hereof are
severable such that the invalidity or unenforceability of any provision hereof
shall not affect the validity or enforceability of the remaining provisions.
This Note has been executed, delivered and accepted at Kingsport, Xxxxxxxx
County, Tennessee, and all funds disbursed to or for the benefit of the
undersigned will be disbursed in Kingsport, Xxxxxxxx County, Tennessee.
IN WITNESS WHEREOF, the undersigned have executed this Note on
the day and year first above written.
BORROWER:
NN BALL & ROLLER, INC.
(SEAL) By:
Attest: ----------------------
Xxxxxxxx X. Xxxx, Vice President
-------------------------------------
Xxxxxxx X. Xxxxx, Assistant Secretary
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EXHIBIT B
Litigation
31
NONE
EXHIBIT C
Contributions to Multi-Employer Pension Pan
NONE
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EXHIBIT D
Subsidiaries
NONE
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EXHIBIT E
NN Ball & Roller
Schedule of Environmental Issues
July, 0000
Xxxxxxxxxx
Xx January 14,1997 an accidental spill occurred involving
approximately 55 to 70 gallons of kerosene. This spill
happened at the back dock area. Clean Management
Environmental Group was called in to clean up the spill.
Due to heavy rains that day, Clean Management could not
remove all of the petroleum contaminated soil. On January
27, 1997, Clean Management returned and completed the clean
up.
The South Carolina Department of Health and Environmental
Control (S.C.D.H.E.C.), was called in to review the site.
On May 6, 1997, S.C.D.H.E.C.. ordered two temporary
monitoring xxxxx to be installed to assess the potential
impact of the groundwater from the impacted soil. The
monitoring xxxxx were installed in June, 1997. Sampling and
analysis that S.C.D.H.E.C.. requested was collected and
analyzed by General Engineering Laboratories. All results
from the analysis came back proving no ground water
contaminations existed. S.C.D.H.E.C.. has reviewed all
results and NN Ball & Roller is now awaiting the go ahead to
remove the monitoring xxxxx. All costs of this project to
date have been covered by Best Plumbing Company, since they were
responsible for the spill.
Xxxxx
In 1988, monitoring xxxxx were installed for an
environmental assessment of the property. In 1994, NN Ball
and Roller made a request to the Tennessee Department of
Environment and Conservation, (T.D.E.C.), to close several
of these monitoring xxxxx, due to building expansion being
planned. T.D.E.C. requested these xxxxx be tested for total
petroleum hydrocarbons, (T.P.H.),. Analysis revealed that
the T.P.H. was above the limit set by the Federal E.P.A. At
the request of T.D.E.C., NN Ball & Roller has installed five
more monitoring xxxxx on the property. T.D.E.C. requested in
December, 1995 that these xxxxx be sampled and analyzed for
T.P.H. on a monthly basis. At this time,
Enviro-Technologies is doing the sampling and Tri-State Lab
is doing the analysis. A monthly report is sent to T.D.E.C.
for their review. The origin of this T.P.H problem is still
not known. NN Ball & Roller may, at the request of T.D.E.C.
have to pump and treat ground water from these xxxxx. The
costs of this project to date have not been material, and
based on information presently available to the Company,
management does not believe that the future costs associated
with this project will have a material adverse effect.
NN Ball & Roller in Xxxxx generates small amounts of
hazardous waste from our Metallurgy Lab. This waste is
disposed of by pouring it down the sewer drain. NN Ball &
Roller has written approval form Xxxxx Utilities to dispose
of these waste acids in this manner.
Mountain City
NN Ball & Roller in Mountain City generates small amounts of
hazardous waste from their Metallurgy Lab. All of this
waste is placed in drums and disposed of by a waste disposal
contractor in accordance with all state and federal
regulations.
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EXHIBIT F
Corporate Names/Tradenames
1. NN Ball & Roller, Inc.
2. N.N. Ball & Roller, Inc.
3. N.N. Ball & Roller Acquisition
35
EXHIBIT G
Permitted Liens
Any and all liens, together or separately, not in excess of Five
Hundred Thousand Dollars ($500,000.00).
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