Exhibit 10.3
CREDIT AGREEMENT
BETWEEN
DC INVESTMENTS LEASING, LLC,
a Mississippi limited liability company,
and
FIRST INDIANA BANK,
N.A., a national banking association
Dated as of
December 18, 2002
TABLE OF CONTENTS
CREDIT AGREEMENT ....................................................Page 1
Section 1. ACCOUNTING TERMS -- DEFINITIONS ..........................Page 1
Section 2. THE TERM LOAN.............................................Page 4
a. The Term Loan.....................................................Page 5
(i) Amount ..................................................... Page 5
(ii) The Term Note ............................................ Page 5
(iii) Interest on the Term Loan ................................ Page 5
(iv) Use of Proceeds of the Term Loan ........................... Page 6
(v) Calculation of Interest.......................................Page 6
(vi)Manner of Payment -- Application ............................ Page 6
(vii) Commitment Fee ............................................ Page 6
(viii) Automatic Debit .......................................... Page 6
Section 3. REPRESENTATIONS AND WARRANTIES........................... Page 6
a. Organization of the Company.......................................Page 6
b. Authorization; No Conflict ...................................... Page 7
c. Validity and Binding Nature/Company ............................. Page 7
d. Organization of Fair Finance......................................Page 7
e. Organization of Fair Holdings ....................................Page 8
f. Organization of DC Investments....................................Page 8
g. Financial Statements ............................................ Page 9
h. Litigation and Contingent Liabilities ........................... Page 9
i. Liens ........................................................... Page 10
j. Employee Benefit Plans ...........................................Page 10
k. Payment of Taxes .................................................Page 10
1. Investment Company Act ...........................................Page 10
m. Regulation U and other Federal Regulations .......................Page 10
n. Hazardous Substances ............................................ Page 11
o. Subsidiaries/Organization of the Affiliated Companies ............Page 11
Section 4 COLLATERAL FOR THE OBLIGATIONS ........................... Page 11
a. Guaranty Agreements.........................................Page 11
b. Security Agreement..........................................Page 12
c. Pledge Agreement............................................Page 12
d. Subordination Agreement ....................................Page 12
Section 5. AFFIRMATIVE COVENANTS.....................................Page 12
a. Corporate Existence.........................................Page 12
b. Reports, Certificates and Other Information ................Page 13
(i) Company's Annual Statements .......................Page 13
(ii) Company's Interim Statements ......................Page 13
(iii) Pyramid's Annual Statements........................Page 14
(iv) Durham and Xxxxxxx Financial Statements ...........Page 14
(v) Officer's Certificate..............................Page 14
(vi) Orders ............................................Page 14
(vii) Notice of Default or Litigation....................Page 14
(viii) Compliance Certificates ...........................Page 15
(ix) Registration Statements and Reports ...............Page 15
(x) Other Information .................................Page 15
c. Books, Records and Inspections ....................Page 15
d. Insurance .........................................Page 15
e. Taxes and Liabilities .............................Page 15
f. Compliance with Legal and Regulatory Requirements..Page 16
g. Financial Covenant ................................Page 16
(i) Debt Service Coverage Ratio ..............Page 16
h. Primary Banking Relationship ......................Page 16
i. Employee Benefit Plans ............................Page 16
j. Hazardous Substances ..............................Page 16
Section 6. NEGATIVE COVENANTS .......................................Page 18
a. Liens ......................................................Page 18
b. Guaranties ................................................ Page 19
c. Loans or Advances ..........................................Page 19
d. Mergers, Consolidations, Sales, Acquisition or Formation
of Subsidiaries.............................................Page 19
e. Margin Stock ...............................................Page 20
f. Other Agreements ...........................................Page 20
g. Judgments ..................................................Page 20
h. Principal Office/Other Matters..............................Page 20
i. Hazardous Substances ...................................... Page 21
j Debt........................................................Page 21
k. Sale and Leaseback .........................................Page 21
1. Accounting Policies.........................................Page 21
m. Change of Business .........................................Page 21
Section 7. CONDITIONS OF LENDING.....................................Page 21
a. No Default..................................................Page 21
b. Documents to be Furnished at Closing........................Page 22
Section 8. EVENTS OF DEFAULT ........................................Page 25
a. Nonpayment of the Loan......................................Page 25
b. Nonpayment of Other Indebtedness for Borrowed Money ........Page 25
c. Other Material Obligations..................................Page 25
d. Bankruptcy, Insolvency, etc ................................Page 26
e. Warranties and Representations .............................Page 26
f. Violations of Negative and Financial Covenants..............Page 26
g. Noncompliance With Other Provisions of this Agreement ......Page 26
Section 9. EFFECT OF EVENT OF DEFAULT ...............................Page 27
Section 10. WAIVER - AMENDMENTS......................................Page 27
Section 11. NOTICES..................................................Page 27
Section 12. COSTS, EXPENSES AND TAXES................................Page 28
Section 13. SEVERABILITY.............................................Page 29
Section 14. CAPTIONS.................................................Page 29
Section 15. GOVERNING LAW -- JURISDICTION .......................... Page 29
Section 16. PRIOR AGREEMENTS, ETC ...................................Page 29
Section 17. SUCCESSORS AND ASSIGNS ..................................Page 30
Section 18. WAIVER OF JURY TRIAL.....................................Page 30
Section 19. ARBITRATION..............................................Page 30
SCHEDULE I
Exhibit "A" Officer's Certificate
Exhibit "B" Promissory Note (Term Loan) ($2,741,867.00)
Exhibit "C-1" Schedule of Exceptions (DC Investments Leasing, LLC)
Exhibit "C-2" Schedule of Exceptions (Fair Holdings, Inc.)
Exhibit "C-3" Schedule of Exceptions (Fair Finance Company)
Exhibit "C-4" Schedule of Exceptions (DC Investments, LLC)
Exhibit "D" [Reserved]
Exhibit "E" Collateral Assignment of Management Agreement
(DC Investments Leasing, LLC, Pyramid
Coach, Inc. and First Indiana Bank, N.A.)
Exhibit "F" Guaranty Agreement (DC Investments, LLC)
Exhibit "G"................Guaranty Agreement (Fair Holdings, Inc.)
Exhibit "H"................Guaranty Agreement (Fair Finance Company)
Exhibit "I"................Guaranty Agreement (Xxxxxxx Xxxxxx)
Exhibit "J"................Guaranty Agreement (Xxxxx Xxxxxxx)
Exhibit "K"................Security Agreement (DC Investments Leasing, LLC)
Exhibit "L"................Pledge Agreement (DC Investments, LLC)
Exhibit "M" Subordination Agreement (DC Investments Leasing, LLC,
Fair Holdings, Inc., and First Indiana Bank, N.A.)
CREDIT AGREEMENT
DC INVESTMENTS LEASING, LLC, a Mississippi limited liability company (the
"Company"), and FIRST INDIANA BANK, N.A., a national banking association with
its principal office in Indianapolis, Indiana (the "Bank"), enter into this
Credit Agreement as of the date set forth below in order to set forth their
agreement as follows.
Section 1. ACCOUNTING TERMS -- DEFINITIONS. All accounting and financial
terms used in this Agreement are used with the meanings such terms would be
given in accordance with generally accepted accounting principles except as may
be otherwise specifically provided in this Agreement. The following terms have
the meanings indicated when used in this Agreement with the initial letter
capitalized:
"Affiliated Companies" means the Company, Fair Holdings, Fair Finance, and
DC Investments, collectively, and in the singular means whichever one of
them the context requires.
"Agreement" means this Credit Agreement between the Company and the Bank,
as it may from time to time be amended.
"Authorized Officer" means the Manager of the Company or such other officer
whose authority to perform acts to be performed only by an Authorized
Officer under the - terms of this Agreement is evidenced to the Bank by a
certified copy of an appropriate resolution of the members of the Company.
"Bank" is used as defined in the preamble.
"Banking Day" means a day on which the principal office of the Bank in the
City of Indianapolis, Indiana, is open for the purpose of conducting
substantially all of the Bank's business activities.
"Buses" means the luxury motor coaches identified on Schedule I attached
hereto. "Collateral" is used as defined in Section 4(c) herein. "Collateral
Assignment of Management Agreement" is used as defined in Section 4(a)
herein.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" is used as defined in the Preamble.
"DC Investments" means DC Investments, LLC, an Indiana limited liability
company.
"EBITDA" means earnings before interest, taxes, depreciation, and
amortization, all determined on a consolidated basis for the Company and
Fair Finance in accordance with GAAP.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" means any of the events described in Section S herein.
"Fair Finance" means Fair Finance Company, an Ohio corporation.
"Fair Holdings" means Fair Holdings, Inc., an Ohio corporation.
"GAAP" means generally accepted account principles as then in effect, which
shall include the official interpretations thereof by the Financial
Accounting Standards Board, consistently applied.
"Guarantor" and "Guarantors" are used as defined in Section 4(b) herein.
"Guaranty Agreement" and "Guaranty Agreements" are used as defined in
Section 4(b) herein.
"Hazardous Substance" means any hazardous or toxic substance regulated by
any federal, state or local statute or regulation including but not limited
to the Comprehensive Environmental Response, Compensation and Liability
Act, the Resource Conservation and Recovery Act and the Toxic Substance
Control Act, or by any federal, state or local governmental agencies having
jurisdiction over the control of any such substance including but not
limited to the United States Environmental Protection Agency.
"Loan" means the Term Loan.
"Loan Document" means any of this Agreement, the Term Note, the Guaranty
Agreements, the Security Agreement, the Pledge Agreement, the Subordination
Agreement, the Collateral Assignment of Management Agreement, and any other
instrument or document which evidences or secures the Loan or which
expresses an agreement as to terms applicable to the Loan, and in the
plural means any two . or more of the Loan Documents, as the context
requires.
"Management Agreement" means that certain Management Agreement dated as of
December 18, 2002, entered into by and between the Company and Pyramid
Coach, Inc., a Tennessee corporation.
"Manager" means Xxxxxxx X. Xxxxxx, an individual residing in the State of
Indiana. "Note" means any of the Term Note.
"Obligations" means all obligations of the Company in favor of the Bank of
every type and description, direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, including but not
limited to all of such obligations on account of the Loan, and all other
obligations arising under any Loan Document as amended from time to time.
"Officer's Certificate" means a certificate in the form included as a part
of Exhibit "A" attached hereto signed by the chief executive officer or the
chief financial officer of the Company, confirming that all of the
representations and warranties contained in Section 3 of this Agreement are
true and correct as of the date of such certificate except as specified
therein and with the further exceptions that: (i) the representation
contained in Section 3(g) shall be construed so as to refer to the latest
financial statements which have been furnished to the Bank as of the date
of any Officer's Certificate, (ii) the representations contained in Section
3(n) (with respect to Hazardous Substances) will be construed so as to
apply not only to the Company, but also to any Subsidiaries, whether now
owned or hereafter acquired, (iii) the representation contained in Section
3(o) shall be deemed to be amended to reflect the existence of any
Subsidiary hereafter formed or acquired by the Company of Fair Holdings
with the consent of the Bank, and (iv) all other representations will be
construed to have been amended to conform with any changes of which the
Company shall have previously given the Bank notice in writing. The
Certificate shall further confirm that no Event of Default or Unmatured
Event of Default shall have occurred and be continuing as of the date of
the Certificate or shall describe any such event which shall have occurred
and be then continuing and the steps being taken by the Company to correct
it.
"Plan" means an employee pension benefit plan as defined in ERISA.
"Pledge Agreement" is used as defined in Section 4(d) herein.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by the Bank, which is not necessarily the
lowest rate charged to any customer, changing when and as said prime rate
changes.
"Security Agreement" is used as defined in Section 4(c) herein.
"Subordination Agreement" is used as defined in Section 4(e) herein.
"Subordinated Debt" means indebtedness of the Company which is subordinated
to the indebtedness of the Company to the Bank under the terms of the
Subordination Agreement, and any other indebtedness of the Company which is
subordinated to the indebtedness of the Company to the Bank such terms that
such indebtedness is the functional equivalent of shareholders' equity.
"Subsidiary" means any corporation, partnership, joint venture or other
business entity over which the Company exercises control; provided, that it
shall be conclusively presumed that the Company exercises control over any
such entity fifty-one percent (51 %) or more of the equity interest in
which is owned by the Company, directly or indirectly.
"Term Loan" is used as defined in Section 2(a) herein. "Term Note" is used
as defined in Section 2(a)(ii) herein. , "Unmatured Event of Default" means
any event specified in Section 8, which is not initially an Event of
Default, but which would, if uncured, become an Event of Default with the
giving of notice or the passage of time or both.
Section 2. THE LOAN. Subject to all of the terms and conditions of this
Agreement, the Bank will make the Loan described in this Section to the Company.
a. The Term Loan. The Bank will make a term loan (the "Term Loan") to the
Company contemporaneously with the execution of this Agreement on the
following terms and subject to the following conditions:
(i) Amount. The principal amount of the Term Loan shall be Two Million
Seven Hundred Forty-One Thousand Eight Hundred Sixty-Seven and 00/ 100
Dollars ($2,741,867.00).
(ii) The Term Note. The obligation of the Company to repay the Term Loan
shall be evidenced by a promissory note of the Company (the "Term
Note") in the form of Exhibit "B" attached hereto. The principal and
interest of the Term Loan shall be repayable in equal monthly
installments of $28,747.86, which shall be due and payable commencing
on the first Banking Day of January, 2003, and on the first Banking
Day of each month thereafter until December 1, 2007, on which date the
entire principal balance of the Term Loan shall be due and payable
together with all accrued and unpaid interest. The Bank reserves the
right to modify the amount of the monthly payment due and payable
hereunder in the event of an increase in the Prime Rate. The principal
of the Term Loan may be prepaid at any time in whole or in part
without penalty, provided that any partial prepayment shall be in an
amount which is an integral multiple of $25,000.00, and provided,
further, that all partial prepayments shall be applied to the latest
maturing installments of principal payable under the Term Loan in
inverse order of maturity.
(iii)Interest on the Term Loan. The unpaid principal balance from time to
time of the Term Loan shall bear interest from the date the Loan is
made prior to the maturity of the Term Note at a rate per annum equal
to the Prime Rate plus one-half percent (1/2%). After maturity,
whether scheduled maturity or maturity by virtue of acceleration on
account of the occurrence of an Event of Default, interest will accrue
on the Term Loan at a rate per annum equal to the Prime Rate plus
three and one-half percent (3-1/2%). Prior to maturity, interest shall
be due and payable together with principal on the first Banking Day of
each month commencing on the first Banking Day of January, 2003, as
provided in Section 2(a)(ii) above. After maturity, interest shall be
payable as accrued and without demand.
(iv) Use of Proceeds of the Term Loan. The proceeds of the Term Loan shall
be used in their entirety to finance the purchase of the luxury motor
coaches identified on Schedule I attached hereto.
(v) Calculation of Interest. Interest on the Term Loan shall be calculated
by applying the ratio of the annual interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by
the actual number of days the principal balance is outstanding.
(vi) Manner of Payment - Application. All payments of principal and
interest on the Term Loan shall be payable at the principal office of
the Bank in Indianapolis, Indiana, in funds available for the Bank's
immediate use in that city and no payment will be considered to have
been made until received in such funds. All payments received on
account of the Term Loan will be applied first to the satisfaction of
any interest which is then due and payable, and to principal only
after all interest which is due and payable has been satisfied. (vii)
Commitment Fee. In addition to payment of interest on the Term Loan as
provided herein, Company shall pay to the Bank prior to or upon the
funding of the Term Loan a commitment fee in the amount of $13,709.34
as a fee for the Bank's commitment to make the Term Loan.
(viii) Automatic Debit. The Bank may debit when due all payments of
principal and interest due under the terms of this Agreement to any
deposit account of the Company carried with the Bank without further
authority.
Section 3. REPRESENTATIONS AND WARRANTIES. To induce the Bank to make the
Loans, the Company represents and warrants to the Bank that:
a. Organization of Company. The Company is a limited liability company
organized, existing and in good standing under the laws of the State of
Mississippi. The Company is qualified to do business in every jurisdiction
in which: (i) the nature of the business conducted or the character or
location of properties owned or leased, or the residences or activities of
employees make such qualification necessary, and (ii) failure so to qualify
might impair the title of the Company to material properties or the
Company's right to enforce material contracts or result in exposure of the
Company to liability for material penalties in such jurisdiction. No
jurisdiction in which the Company is not qualified to do business has
asserted that the Company is required to be qualified therein. The
principal office,of the Company is located at 0000 Xxxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxxxx 00000-0000. The Company does not conduct any
material operations or keep any material amounts of property at any other
location, except 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxx
00000. The Company has not done business under any name other than its
present corporate name at any time during the six years preceding the date
of this Agreement.
b. Authorization of Company: No Conflict. The execution and delivery of this
Agreement, the borrowings hereunder, the execution and delivery of all of
the other Loan Documents and the performance by the Company of its
obligations under this Agreement and all of the other Loan Documents are
within the Company's corporate powers, have been duly authorized by all
necessary corporate action, have received any required governmental or
regulatory agency approvals and do not and will not contravene or conflict
with any provision of law or of the Articles of Organization or Operating
Agreement of the Company or of any agreement binding upon the Company or
its properties.
c. Validity and Binding Nature/Company. This Agreement and all of the other
Loan Documents are the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws enacted for the
relief of debtors generally and other similar laws affecting the
enforcement of creditors' rights generally or by equitable principles which
may affect the availability of specific performance and other equitable
remedies.
d. Organization of Fair Finance. Fair Finance is a corporation organized,
existing and in good standing under the laws of the State of Ohio. Fair
Finance is qualified to do business in every jurisdiction in which: (i) the
nature of the business conducted or the character or location of properties
owned or leased, or the residences or activities of employees make such
qualification necessary, and (ii) failure so to qualify might impair the
title of Fair Finance to material properties or Fair Finance's right to
enforce material contracts or result in exposure of Fair Finance to
liability for material penalties in such jurisdiction. No jurisdiction in
which Fair Finance is not qualified to do business has asserted that Fair
Finance is required to be qualified therein. The principal office of Fair
Finance is located at 000 Xxxx Xxxx Xxxxxx, Xxxxx, Xxxx 00000. Fair Finance
does not conduct any material operations or keep any material amounts of
property at any other location, except 000 Xxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxxxxxx, Xxxxxxx 00000. Fair Finance has not done business under any
name other than its present corporate name at any time during the six years
preceding the date of this Agreement.
e. Organization of Fair Holdings.. The Fair Holdings is a corporation
organized, existing and in good standing under the laws of the State of
Ohio. Fair Holdings is qualified to do business in every jurisdiction in
which: (i) the nature of the business conducted or the character or
location of properties owned or leased, or the residences or activities of
employees make such qualification necessary, and (ii) failure so to qualify
might impair the title of Fair Holdings to material properties or Fair
Holdings' right to enforce material contracts or result in exposure of Fair
Holdings' to liability for material penalties in such jurisdiction. No
jurisdiction in which Fair Holdings is not qualified to do business has
asserted that Fair Holdings is required to be qualified therein. The
principal office of Fair Holdings is located at 000 Xxxx Xxxx Xxxxxx,
Xxxxx, Xxxx 00000. Fair Holdings does not conduct any material operations
or keep any material amounts of property at any other location, except 000
Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxx 00000. Fair Holdings has
not done business under any name other than its present corporate name at
any time during the six years preceding the date of this Agreement.
f. Organization of DC Investments. DC Investments is a limited liability
company organized, existing and in good standing under the laws of the
State of Indiana. DC Investments is qualified to do business in every
jurisdiction in which: (i) the nature of the business conducted or the
character or location of properties owned or leased, or the residences or
activities of employees make such qualification necessary, and (ii) failure
so to qualify might impair the title of DC Investments to material
properties or DC Investments's right to enforce material contracts or
result in exposure of DC Investments to liability for material penalties in
such jurisdiction. No jurisdiction in which DC Investments is not qualified
to do business has asserted that DC Investments is required to be qualified
therein. The principal office of DC Investments is located at 000 Xxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxx 00000. DC Investments does not
conduct any material operations or keep any material amounts of property at
any other location. DC Investments has not done business under any name
other than its present corporate name at any time during the six years
preceding the date of this Agreement.
g. Financial Statements. Fair Holdings and Fair Finance have delivered to the
Bank their unaudited consolidated financial statements dated as of
September 30, 2002, and for the fiscal quarter and partial fiscal year then
ended. Such statements have been prepared in accordance with generally
accepted accounting principles consistently applied except, as to the
interim statements, for the absence of a statement of cash flows, footnotes
and adjustments normally made at year end which are not material in amount.
Such statements present fairly the consolidated financial position of Fair
Holdings and of Fair Finance as of the dates thereof and the results of
their respective operations for the periods covered, and since the date of
the latest of such statements there has been no material adverse change in
the financial position of the Company, Fair Holdings, or of Fair Finance,
or in the results of their respective operations.
h. Litigation and Contingent Liabilities. No litigation, arbitration
proceedings or governmental proceedings are pending or threatened against
the Company, Fair Finance, Fair Holdings, or DC Investments which would, if
adversely determined, materially and adversely affect its respective
financial position or continued operations. None of the Company, Fair
Finance, Fair Holdings, or DC Investments has any material contingent
liabilities not provided for or disclosed in the financial statements
referred to in Section 3(g) or in the "Schedules of Exceptions" attached
hereto as Exhibits "C-1." "C-2." "C-3." and "C-4."
i. Liens. None of the assets of any of the Company is subject to any mortgage,
pledge, title retention lien, or other lien, encumbrance or security
interest except for liens and security interests described in the
exceptions enumerated in Section 6(b).
j. Employee Benefit Plans. Each Plan maintained by each of the Affiliated
Companies is in material compliance with ERISA, the Code, and all
applicable rules and regulations adopted by regulatory authorities pursuant
thereto, and each of the Affiliated Companies has filed all reports and
returns required to be filed by ERISA, the Code and such rules and
regulations. No Plan maintained by any of the Affiliated Companies and no
trust created under any such Plan has incurred any "accumulated funding
deficiency" within the meaning of Section 412(c)(1) of the Code, and the
present value of all benefits vested under each Plan did not exceed, as of
the last annual valuation date, the value of the assets of the respective
Plans allocable to such vested benefits. The Company has no knowledge that
a "reportable event," as defined in ERISA, has occurred with respect to any
Plan maintained by any of the Affiliated Companies.
k. Payment of Taxes. Each of the Affiliated Companies has filed all federal,
state and local tax returns and tax related reports which it is required to
file by any statute or regulation and all taxes and any tax related
interest payments and penalties that are due and payable have been paid,
except for such as are being contested in good faith and by appropriate
proceedings and as to which appropriate reserves have been established.
Adequate provision has been made for the payment when due of all tax
liabilities which have been incurred, but are not as yet due and payable.
l. Investment Company Act. None of the Affiliated Companies is an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
m. Regulation U and other Federal Regulations. The Company is not engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System. Not more than twenty-five percent (25 %) of the
consolidated assets of the Company consists of margin stock, within the
contemplation of Regulation U, as amended.
n. Hazardous Substances. Except as disclosed on the "Schedules of Exceptions"
attached hereto as Exhibits "C-1." "C-2," "C-3." and "C-4" and to the best
knowledge of the Company after due inquiry and investigation; (i) there are
no underground storage tanks of any kind on any premises owned or occupied
by or under lease to any of the Affiliated Companies; (ii) there are no
tanks, drums or other containers of any kind on premises owned or occupied
by or under lease to any of the Affiliated Companies, the contents of which
are unknown to the respective Affiliated Company (iii) no premises owned or
occupied by or under lease to any of the Affiliated Companies have ever
been used, and as of the date of this Agreement, no such premises are being
used for any activities involving the use, treatment, transportation,
generation, storage or disposal of any Hazardous Substances in reportable
quantities, and (iv) no Hazardous Substances in reportable quantities have
been released on any such premises nor is there any threat of release of
any Hazardous Substances in reportable quantities on any such premises.
o. Subsidiaries/Organization of the. Affiliated Companies. DC Investments is
the sole member of the Company and the sole shareholder of Fair Holdings.
Fair Holdings is the sole shareholder of Fair Finance. The Company has no
Subsidiaries as of the date of this Agreement. Fair Finance has no
Subsidiaries as of the date of this Agreement.
Section 4. COLLATERAL FOR THE OBLIGATIONS. The Obligations will be secured
and supported as provided in this Section:
a. Guaranty Agreements. Payment of the Obligations shall be supported by the
unconditional guaranty of prompt payment of DC Investments, Fair Holdings,
and Fair Finance, which guaranties shall be evidenced by the Guaranty
Agreements in the forms attached hereto as Exhibits "F." "G." and "H."
respectively (the "DC Investments Guaranty," the "Fair Holdings Guaranty,"
and the "Fair Finance Guaranty," respectively) , and by the unconditional
guaranty of prompt payment of Xxxxxxx Xxxxxx ("Xxxxxx") and Xxxxx Xxxxxxx
("Xxxxxxx"), which guaranties shall be evidenced by the Guaranty Agreements
in the forms attached hereto as Exhibits "I" and "J" , respectively (the
"Durham Guaranty" and the "Xxxxxxx Guaranty") (DC Investments, Fair
Holdings, Fair Finance, Durham, and Xxxxxxx are each hereinafter referred
to as "Guarantor" and collectively as the "Guarantors," and the DC
Investments Guaranty, the Fair Holdings Guaranty, the Fair Finance
Guaranty, the Durham Guaranty, and the Xxxxxxx Guaranty are each
hereinafter referred to as a "Guaranty Agreement" and collectively as the
"Guaranty Agreements").
b. Security Agreement. The Obligations shall be secured by a first lien
security interest in all of the Buses and in all proceeds thereof
(collectively, the "Collateral"), which security interest shall be created
by a Security Agreement in the form attached hereto as Exhibit "I" (the
"Security Agreement"). The Security Agreement will provide a security
interest in the collateral described therein subject only to liens and
security interests described in the exceptions enumerated in Section 6(b).
c. Pledge Agreement. The obligations of DC Investments under its Guaranty
Agreement shall be secured by a first lien on and pledge of all of DC
Investments' membership interest in the Company, which lien and pledge
shall be created by a Pledge Agreement in the form attached hereto as
Exhibit "L" (the "Pledge Agreement").
d. Subordination. The obligation of the Company to repay a loan in the
original principal amount of $690,468.67 made by Fair Holdings to the
Company shall be subordinated to the prior payment of the Obligations to
the Bank pursuant to the terms of that certain Subordination Agreement to
be entered into by and among the Company, Fair Holdings, and the Bank in
the form attached hereto as Exhibit "M" (the "Subordination Agreement").
Section 5. AFFIRMATIVE COVENANTS. Until all Obligations of the Company
terminate and are paid and satisfied in full, the Company shall strictly observe
the following covenants:
a. Corporate Existence. The Company shall each preserve its existence as a
Mississippi limited liability company, and shall cause Fair Holdings to
preserve its existence as an Ohio corporation, DC Investments to preserve
its existence as an Indiana limited liability company, and Fair Finance to
preserve its existence as an Ohio corporation. The Company shall not and
shall not permit any of the Affiliated Companies to change its name in any
respect as it appears on its Articles of Incorporation or Articles of
Organization, as applicable, filed with the Secretary of State of the State
of its organization as of the date of this Agreement, or change the State
of its domicile without giving the Bank not less than 10 calendar days
prior written notice.
b. Reports. Certificates and Other Information. The Company shall furnish to
the Bank copies of the following financial statements, certificates and
other information:
(i) Company's Annual Statements. As soon as available and in any event
within one hundred twenty (120) days after the close of each fiscal
year, the consolidated financial statements of the Company and the
Affiliated Companies for such fiscal year prepared and presented in
accordance with generally accepted accounting principles, consistently
applied (except for changes in which the independent accountants of
the Company concur) in each case setting forth in comparative form
corresponding figures for the preceding fiscal year, together with the
audit report, unqualified as to scope, of independent certified public
accountants approved by the Bank, which approval shall not be
unreasonably withheld, together with the management letter, if any,
issued by such independent certified public accountants;
(ii) Company's Interim Statements. As soon as available and in any event
within sixty (60) days after the end of each calendar month, a copy of
the interim consolidated financial statements of the Company and the
Affiliated Companies for such calendar month, consisting at a minimum
of:
A. the balance sheet as of the end of the calendar month, and
B. a statement of income for the calendar month and for the partial
or full fiscal year ended as of the end of the calendar month,
all in reasonable detail and accompanied by the written
representation of the chief financial officer of the Company that
such financial statements have been prepared in accordance with
generally accepted accounting principles (except that they need
not include a statement of cash flows and footnotes and need not
reflect adjustments normally made at year end, if such
adjustments are not material in amount), consistently applied,
(except for changes in which the independent accountants of the
Company concur) and present fairly the financial position of the
Company and the Affiliated Companies and the results of their
respective operations as of the dates of such statements and for
the fiscal periods then ended.
(iii)Pyramid's Annual Statements. As soon as available and in any event
within ninety (90) days after the close of each fiscal year, the
financial statements of Pyramid Coach, Inc., a Tennessee corporation
("Pyramid") for such fiscal year prepared and presented in accordance
with generally accepted accounting principles, consistently applied
(except for changes in which the independent accountants of Pyramid
concur) in each case setting forth in comparative form corresponding
figures for the preceding fiscal year.
(iv) Durham and Xxxxxxx Financial Statements. On or before April 15 each
year, the financial statements of Durham and Xxxxxxx on the Bank's
form.
(v) Officer's Certificate. Contemporaneously with the furnishing of each
set of financial statements provided for in Sections 5(b)(i) and
5(b)(ii), an Officer's Certificate.
(vi) Orders. Prompt notice of any orders in any material proceedings to
which the Company or any Affiliated Company is a party, issued by any
court or regulatory agency, federal or state, and if the Bank should
so request, a copy of any such order.
(vii)Notice of Default or Litigation. Immediately upon learning of the
occurrence of an Event of Default or Unmatured Event of Default, or
the institution of or any adverse determination in any litigation,
arbitration proceeding or governmental proceeding which is material to
the Company or to any Affiliated Company, or the occurrence of any
event which could have a material adverse effect upon the Company or
upon any Affiliated Company, written notice thereof describing the
same and the steps being taken with respect thereto.
(viii) Compliance Certificates. Within thirty (30) days following each
month end, a certificate of the Chief Financial Officer or other
appropriate officer of the Company demonstrating compliance with the
financial covenants stated in Section 5(g). Such certificate shall
relate the covenants to the month-end figures and shall otherwise be
in such form and provide such detail as may be reasonably satisfactory
to the Bank.
(ix) Registration Statements and Reports. Promptly upon filing with the
Securities and Exchange Commission or any state securities regulatory
authority by or on behalf of the Company or any Affiliated Company,
copies of all registration statements and all periodic and special
reports required or permitted to be filed under federal or state
securities laws and regulations.
(x) Other Information. From time to time such other information concerning
the Company or any Affiliated Company as the Bank may reasonably
request.
c. Books. Records and Inspections. The Company shall and shall cause each
Affiliated Company to maintain complete and accurate books and records, and
permit access thereto by the Bank for purposes of inspection, copying and
audit, and the Company shall and shall cause each Affiliated Company to
permit the Bank to inspect its properties and operations at all reasonable
times.
d. Insurance. The Company shall and shall cause each Affiliated Company to
maintain such insurance as may be required by law and such other insurance,
to such extent and against such hazards and liabilities, as is customarily
maintained by companies similarly situated. The Company shall and shall
cause each Affiliated Company to provide a copy of any such policy to the
Bank.
e. Taxes and Liabilities. The Company shall and shall cause each Affiliated
Company to pay when due all taxes, license fees, assessments and other
liabilities except such as are being contested in good faith and by
appropriate proceedings and for which appropriate reserves have been
established.
f. Compliance with Legal and Regulatory Requirements. The Company shall and
shall cause each Affiliated Company to maintain material compliance with
the applicable provisions of all federal, state and local statutes,
ordinances and regulations and any court orders or orders of regulatory
authorities issued thereunder.
g. Financial Covenant. The Company shall observe the following financial
covenant calculated on a consolidated basis with the Affiliated Companies:
(i) Debt Service Coverage Ratio. As of the end of each fiscal year
commencing with the fiscal year ending December 31, 2002, maintain a
consolidated debt service coverage ratio of not less than 1.20 to
1.00. For purposes of this covenant, the phrase "debt service coverage
ratio" means the ratio of:
(A) the Company's and the Affiliated Companies' EBITDA minus unfunded
capital expenditures, over
(B) the sum of the principal paid on the Term Loan plus interest
expense.
h. Primary Banking RelationsThe Company shall maintain its primary
concentration and deposit accounts with the Bank.
i. Employee Benefit Plans. The Company shall and shall cause each Affiliated
Company and all Subsidiaries to maintain all Plans in material compliance
with ERISA, the Code, and all rules and regulations of regulatory
authorities pursuant thereto and shall file and shall cause the Affiliated
Companies and all Subsidiaries to file all reports required to be filed
pursuant to ERISA, the Code, and such rules and regulations.
j . Hazardous Substances. If the Company, any Affiliated Company, or any
Subsidiary should commence the use, treatment, transportation, generation,
storage or disposal of any Hazardous Substance in reportable quantities in
its operations in addition to those noted in Exhibits "C-1", "C-2." "C-3."
and "C-4" attached hereto, the Company shall immediately notify the Bank of
the commencement of such activity with respect to each such Hazardous
Substance. The Company or the applicable Affiliated Company shall cause any
Hazardous Substances which are now or may hereafter be used or generated in
the operations of the Company or of such Affiliated Company or any
Subsidiary in reportable quantities to be accounted for and disposed of in
compliance with all applicable federal, state and local laws and
regulations. The Company shall notify the Bank immediately upon obtaining
knowledge that:
(i) any premises which have at any time been owned or occupied by or have
been under lease to the Company, any Affiliated Company, or any
Subsidiary are the subject of an environmental investigation by any
federal, state or local governmental agency having jurisdiction over
the regulation of any Hazardous Substances, the purpose of which
investigation is to quantify the levels of Hazardous Substances
located on such premises; or
(ii) the Company, any Affiliated Company, or any Subsidiary has been named
or is threatened to be named as a party responsible for the possible
contamination of any real property or ground water with Hazardous
Substances, including, but not limited to the contamination of past
and present waste disposal sites.
If the Company, any Affiliated Company, or any Subsidiary is notified of
any event described at items (i) or (ii) above, the Company or the
applicable Affiliated Company shall immediately engage or cause the
Subsidiary to engage a firm or firms of engineers or environmental
consultants appropriately qualified to determine as quickly as practical
the extent of contamination and the potential financial liability of the
Company, the Affiliated Company, or the Subsidiary with respect thereto,
and the Bank shall be provided with a copy of any report prepared by such
firm or by any governmental agency as to such matters as soon as any such
report becomes available to the Company or to the Affiliated Company, and
Company or the applicable Affiliated Company shall immediately establish
reserves in the amount of the potential financial liability of the Company,
the applicable Affiliated Company, or the Subsidiary identified by such
environmental consultants or engineers. The selection of any engineers or
environmental consultants engaged pursuant to the requirements of this
Section shall be subject to the approval of the Bank, which approval shall
not be unreasonably withheld.
Section 6. NEGATIVE COVENANTS. Until all Obligations of the Company
terminate and are paid and satisfied in full, the Company shall strictly observe
the following covenants:
a. Liens. The Company shall not create or permit to exist any mortgage,
pledge, title retention lien or other lien, encumbrance or security
interest (all of which are hereafter referred to in this subsection as a
"lien" or "liens") with respect to any property or assets now owned or
hereafter acquired except:
(i) liens in favor of the Bank created pursuant to the requirements of
this Agreement or otherwise;
(ii) any lien or deposit with any governmental agency required or permitted
to qualify the Company to conduct business or exercise any privilege,
franchise or license, or to maintain self-insurance or to obtain the
benefits of or secure obligations under any law pertaining to worker's
compensation, unemployment insurance, old age pensions, social
security or similar matters, or to obtain any stay or discharge in any
legal or administrative proceedings, or any similar lien or deposit
arising in the ordinary course of business;
(iii)any mechanic's, worker's, repairmen's, carrier's, warehousemen's or
other like liens arising in the ordinary course of business for
amounts not yet due and for the payment of which adequate reserves
have been established, or deposits made to obtain the release of such
liens;
(iv) easements, licenses, minor irregularities in title or minor
encumbrances on or over any real property which do not, in the
judgment of the Bank, materially detract from the value of such
property or its marketability or its usefulness in the business of the
Company;
(v) liens for taxes and governmental charges which are not yet due or
which are being contested in good faith and by appropriate proceedings
and for which appropriate reserves have been established;
(vi) liens created by or resulting from any litigation or legal proceeding
which is being contested in good faith and by appropriate proceedings
and for which appropriate reserves have been established; and
(vii)those specific liens now existing described on the "Schedule of
Exceptions" attached hereto as Exhibit "C-1."
c. Guaranties. The Company shall not be a guarantor or surety of, or otherwise
be responsible in any manner with respect to any undertaking of any other
person or entity, whether by guaranty agreement or by agreement to purchase
any obligations, stock, assets, goods or services, or to supply or advance
any funds, assets, goods or services, or otherwise, except for:
(i) guaranties in favor of the Bank;
(ii) guaranties by endorsement of instruments for deposit made in the
ordinary course of business; and
(iii)those specific existing guaranties listed in the "Schedule of
Exceptions" attached hereto as Exhibit "C-1."
c. Loans or Advances. The Company shall not make or permit to exist any loans
or advances to any other person or entity, except for:
(i) extensions of credit or credit accommodations to customers or vendors
made by the Company in the ordinary course of its business as now
conducted;
(ii) reasonable salary advances to non-executive employees, and other
advances to agents and employees for anticipated expenses to be
incurred on behalf of the Company in the course of discharging their
assigned duties; and
(iii)the specific items listed in the "Schedule of Exceptions" attached
hereto as Exhibit "C-1."
d. Mergers, Consolidations. Sales. Acquisition or Formation of Subsidiaries.
The Company shall not be party to or permit any Affiliated Company to be a
party to any consolidation or to any merger without the Bank's prior
written consent. The Company shall not purchase the capital stock of or
otherwise acquire any equity interest in any other business entity. The
Company shall not acquire any material part of the assets of any other
business entity, except in the ordinary course of business. The Company
shall not and shall not permit any Affiliated Company to sell, transfer,
convey or lease all or any material part of its assets, except in the
ordinary course of business, or sell or assign with or without recourse any
receivables, except that Fair Financing and Fair Holdings may sell their
accounts receivable under securitization transactions. The Company shall
not cause to be created or otherwise acquire any Subsidiaries.
e. Margin Stock. The Company shall not use or cause or permit the proceeds of
the Term Loan to be used, either directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any
margin stock within the meaning of Regulation U of the Board of Governors
of the Federal Reserve System, as amended from time to time.
e. Other Agreements. The Company shall enter into any agreement containing any
provision which would be violated or breached in material respect by the
performance of its obligations under this Agreement or under any other Loan
Document.
g. Judgments. The Company shall not permit any uninsured judgment or monetary
penalty rendered against it in any judicial or administrative proceeding to
remain unsatisfied for a period in excess of forty-five (45) days unless
such judgment or penalty is being contested in good faith by appropriate
proceedings and execution upon such judgment has been stayed, and unless an
appropriate reserve has been established with respect thereto.
h. Principal Office/Other Matters. The Company shall not change its name or
permit any Affiliated Company to change its name, or the location of its
principal office, or its places of business, and shall not change the State
in which the Collateral is titled to any State other than the State of
Mississippi, unless it gives not less than thirty (30) days prior written
notice of any such change to the Bank. After providing such notice, the
Company or the applicable Affiliated Company each agree to promptly
reimburse the Bank for all of the Bank's counsel and/or special counsel
fees and expenses incurred by the Bank in connection with advising the Bank
as to the perfection of its security interest in the Collateral that will
be titled or regularly located in such additional states or jurisdictions.
i. Hazardous Substances. The Company shall not and shall not permit any
Affiliated Company to release or to permit to continue the release or
threatened release of any Hazardous Substance on any premises owned or
occupied by or under lease to it.
j. Debt. The Company shall not incur or permit to exist any indebtedness for
borrowed money except to the Bank and except for those existing obligations
disclosed on the "Schedule of Exceptions" attached hereto as Exhibits "C-1"
and except loans from an Affiliated Company which are unsecured. For
purposes of this covenant, the phrase "indebtedness for borrowed money,"
shall be construed to include capital lease obligations.
k. Sale and Leaseback. The Company shall not enter into any arrangements,
directly or indirectly, with a person or entity whereby it shall sell or
transfer any property used or useful in its business and then or thereafter
rent or lease such property for substantially the same purpose as the
property sold or transferred.
1. Accounting Policies. The Company shall not change its fiscal year or any of
its significant accounting methods, policies or procedures, except to the
extent necessary to comply with GAAP.
m. Change of Business. The Company shall not make any material change in the
nature of its business as an owner and lessor of luxury motor buses as
carried on at the date of this Agreement.
Section 7. CONDITIONS OF LENDING. The obligation of the Bank to make the
Term Loan shall be subject to fulfillment of each of the following conditions
precedent:
a. No Default. No Event of Default or Unmatured Event of Default shall have
occurred and be continuing, and the representations and warranties of the
Company contained in Section 3 shall be true and correct as of the date of
this Agreement and as of the date of each Advance, except that after the
date of this Agreement:
(i) the representations contained in Section 3(g) will be construed so as
to refer to the latest financial statements furnished to the Bank by
the Company pursuant to the requirements of this Agreement,
(ii) the representations contained in Section 3(n) (with respect to
Hazardous Substances) will be construed so as to apply not only to the
Company, but also to any Subsidiaries,
(iii)the representation contained in Section 3(o) will be construed so as
to except any Subsidiary which may hereafter be formed or acquired by
the Company with the consent of the Bank, and
(iv) all other representations will be construed to have been amended to
conform with any changes of which the Bank shall previously have been
given notice in writing by the Company.
b. Documents to be Furnished at Closing. The Bank shall have received
contemporaneously with the execution of this Agreement, the following, each
duly executed, currently dated and in form and substance satisfactory to
the Bank:
(i) The Term Note.
(ii) The Security Agreement and requisite Uniform Commercial Code financing
statements.
(iii)Copies of all vehicle titles of the luxury motor vehicles purchased
with the proceeds of the Term Loan.
(iv) The Guaranty Agreements executed by the Guarantors and a completed
Certificate Regarding Solvency from Fair Finance.
(v) The Schedules of Exceptions duly completed and executed by the Company
and the Affiliated Companies.
(vi) The Pledge Agreement duly executed by DC Investments.
(vii)The Subordination Agreement duly executed by Fair Holdings and the
Company together with a complete copy of the Promissory Note
subordinated pursuant thereto marked with an appropriate subordination
legend.
(viii) The Collateral Assignment of Management Agreement duly executed by
the Company and Pyramid Coach, Inc. and the Company together with a
fully executed Management Agreement.
(ix) Resolutions of the Members of DC Investments, the sole Member of the
Company, authorizing on behalf of the Company the execution and
delivery of this Agrement, the Term Note, its Schedule of Exceptions,
the Security Agreement, the Collateral Assignment of Leases, and the
other Loan Documents to which the Company is a party, as well as the
Prevost Acquisition Documents and Obsidian Acquisition Documents to
which the Company is a party, and any other documents required to be
executed by the Company pursuant to the terms of this Agreement.
(x) Resolutions of the Members of DC Investments authorizing the execution
and delivery of its Guaranty Agreement, the Pledge Agreement, and the
other Loan Documents to which DC Investments is a party pursuant to
the terms of this Agreement.
(xi) The Certificate of Incumbency of the Managing Member of DC Investments
certifying the names of the officer or officers authorized to sign its
Guaranty Agreement, the Pledge Agreement, and the other Loan Documents
to which DC Investments and/or the Company is a party, together with a
sample of the true signature of each such officer.
(xii)Articles of Organization of DC Investments, certified as of a recent
date by the Mississippi Secretary of State as complete and correct.
(xiii) Articles of Organization of the Company, certified as of a recent
date by the Mississippi Secretary of State as complete and correct.
(xiv)Certificate of Good Standing issued by the Mississippi Secretary of
State as of a recent date for the Company.
(xv) Certificate of Good Standing issued by the Mississippi Secretary of
State as of a recent date for the Company.
(xvi)Operating Agreement of the Company certified as complete and correct
by the Manager of the Company.
(xvii) Operating Agreement of DC Investments certified as complete and
correct by the Manager of DC Investments.
(xviii) Resolutions of the Board of Directors of Fair Holdings authorizing
the execution and delivery of its Guaranty Agreement, the
Subordination Agreement, and the other Loan Documents to which Fair
Holdings is a party.
(xix)The Certificate of Incumbency of the Secretary of the Board of
Directors of Fair Holdings certifying the names of the officer or
officers authorized to execute its Guaranty Agreement, the
Subordination Agreement, and the other Loan Documents provided for in
this Agreement to which Fair Holdings is a party, together with a
sample of the true signature of each such officer.
(xx) Articles of Incorporation and Certificate of Incorporation of Fair
Holdings certified by the Ohio Secretary of State as complete and
correct as of a recent date.
(xxi)Certificate of Good Standing issued by the Ohio Secretary of State as
of a recent date for Fair Holdings.
(xxii) Bylaws of Fair Holdings certified as complete and correct by the
Secretary of the Board of Directors of Fair Holdings.
(xxiii) Resolutions of the Board of Directors of Fair Finance authorizing
the execution, delivery and performance, respectively, of its Guaranty
Agreement and the other Loan Documents required pursuant to the terms
of this Agreement to which Fair Finance is a party.
(xxiv) The Certificate of Incumbency of the Secretary of the Board of
Directors of Fair Finance certifying the names of the officer or
officers authorized to execute its Guaranty Agreement and the other
Loan Documents provided for in this Agreement to which Fair Finance is
a party, together with a sample of the true signature of each such
officer.
(xxv)The Articles of Incorporation of Fair Finance certified as complete
and correct as of a recent date by the Ohio Secretary of State.
(xxvi) By-Laws of Fair Finance certified as complete and correct by the
Secretary of the Board of Directors of Fair Finance.
(xxvii) Certificate of Good Standing for Fair Finance issued as of a recent
date by the Secretary of State of Ohio.
(xxviii) The opinion of counsel for the Company addressed to the Bank to
the effect that the representations stated in Sections 3(a), 3(b),
3(c), 3(d), 3(e), 3(f), 3(i), 3(1) and 3o) are correct. Such opinion
shall be in such form as may be reasonably acceptable to the Bank.
(xxix) Certificates evidencing the existence of all insurance required
under the terms of this Agreement or any other Loan Documents.
(xxx)Payment of the commitment fee required under the terms of Section
2(a)(vii).
(xxxi) Complete copies of Purchase Agreements setting forth the terms of
the purchase of the luxury motor coaches purchased with the proceeds
of the Term Loan.
(xxxii)Such other documents as the Bank may reasonably require.
(xxxiii)Payment of the fees of legal counsel for the Bank incurred in
connection with the drafting, negotiation, and execution of this
Agreement and the other Loan Documents.
Section 8. EVENTS OF DEFAULT. Each of the following shall constitute an
Event of Default under this Agreement:
a. Nonpayment of the Loan. Default in the payment when due of any amount
payable under the terms of the Note, or otherwise payable to the Bank or
any other holder of the Notes under the terms of this Agreement.
b. Nonpayment of Other Indebtedness for Borrowed Money. Default by the Company
or by any Guarantor in the payment when due, whether by acceleration or
otherwise, of any other material indebtedness for borrowed money, or
default in the performance or observance of any obligation or condition
with respect to any such other indebtedness if the effect of such default
is to accelerate the maturity of such other indebtedness or to permit the
holder or holders thereof, or any trustee or agent for such holders, to
cause such indebtedness to become due and payable prior to its scheduled
maturity, unless the Company or the applicable Guarantor is contesting the
existence of such default in good faith and by appropriate proceedings.
c. Other Material Obligations. Subject to the expiration of any applicable
grace period, default by the Company or by any Guarantor in the payment
when due, or in the performance or observance of any material obligation
of, or condition agreed to by the Company or by any Guarantor with respect
to any material purchase or lease of goods, securities or services except
only to the extent that the existence of an such default is being contested
in good faith and by appropriate proceedings and that appropriate reserves
have been established with respect thereto.
d. Bankruptcy. Insolvency, etc. The Company or any Guarantor admitting in
writing its inability to pay its debts as'they mature or an administrative
or judicial order of dissolution or determination of insolvency being
entered against the Company or any Guarantor; or the Company or any
Guarantor applying for, consenting to, or acquiescing in the appointment of
a trustee or receiver for the Company or such Guarantor or any property
thereof, or the Company or any Guarantor making a general assignment for
the benefit of creditors; or, in the absence of such application, consent
or acquiescence, a trustee or receiver being appointed for the Company or
any Guarantor or for a substantial part of its property and not being
discharged within sixty (60) days; or any bankruptcy, reorganization, debt
arrangement, or other proceeding under any bankruptcy or insolvency law, or
any dissolution or liquidation proceeding being instituted by or against
the Company or any Guarantor, and, if involuntary, being consented to or
acquiesced in by the Company or such Guarantor, as applicable, or remaining
for sixty (60) days undismissed.
e. Warranties and Representations. Any warranty or representation made by the
Company or any Guarantor in this Agreement or in any other Loan Document
proving to have been false or misleading in any material respect when made,
or any schedule, certificate, financial statement, report, notice, or other
writing furnished by the Company or any Guarantor to the Bank proving to
have been false or misleading in any material respect when made or
delivered.
f. Violations of Negative and Financial Covenants. Failure by the Company to
comply with or perform the financial covenant stated in Section S(g) or any
covenant in Section 6 of this Agreement.
f. Noncompliance With Other Provisions of this Agreement. Failure of the
Company to comply with or perform any covenant or other provision of this
Agreement or to perform any other Obligation (which failure does not
constitute an Event of Default under any of the preceding provisions of
this Section 8) and continuance of such failure for thirty (30) days after
notice thereof to the Company from the Bank.
Section 9. EFFECT OF EVENT OF DEFAULT. If any Event of Default described in
Section 8(d) shall occur, maturity of the Loan shall immediately be accelerated
and the Note and the Loan evidenced thereby, and all other indebtedness and any
other payment Obligations of the Company to the Bank shall become immediately
due and payable, all without notice of any kind. When any other Event of Default
has occurred and is continuing, the Bank or any other holder of the Note may
accelerate payment of the Loan and declare the Note and all other payment
Obligations due and payable, whereupon maturity of the Loan shall be accelerated
and the Note and the Loan evidenced thereby, and all other payment Obligations
shall become immediately due and payable, all without notice of any kind. The
Bank or such other holder shall promptly advise the Company of any such
declaration, but failure to do so shall not impair the effect of such
declaration. The remedies of the Bank specified in this Agreement or in any
other Loan Document shall not be exclusive, and the Bank may avail itself of any
other remedies provided by law as well as any equitable remedies available to
the Bank.
Section 10. WAIVER -- AMENDMENTS. No delay on the part of the Bank, or any
holder of the Note in the exercise of any right, power or remedy shall operate
as a waiver thereof, nor shall any single or partial exercise by any of them of
any right, power or remedy preclude any other or further exercise thereof, or
the exercise of any other right, power or remedy. No amendment, modification or
waiver of, or consent with respect to any of the provisions of this Agreement or
the other Loan Documents or otherwise of the Obligations shall be effective
unless such amendment, modification, waiver or consent is in writing and signed
by the Bank.
Section 11. NOTICES. Any notice given under or with respect to this
Agreement to the Company or the Bank shall be in writing and, if delivered by
hand or sent by overnight courier service, shall be deemed to have been given
when delivered and, if mailed, shall be deemed to have been given five (5) days
after the date when sent by registered or certified mail, postage prepaid, and
addressed to the Company or the Bank (or other holder of the Note) at its
address shown below, or at such other address as any such party may, by written
notice to the other party to this Agreement, have designated as its address for
such purpose. The addresses referred to are as follows:
As to the Company: DC Investments Leasing, LLC
Bank One Center/Tower Suite 4800
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone:(000) 000-0000
with copies to: Xxxx X. Xxxxx, Esquire
Xxxxxxxxx & Xxxxxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Telephone:(000) 000-0000
As to the Bank: First Indiana Bank, N.A.
000 Xxxxx Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Vice President
Telephone: (000) 000-0000
with copies to: Xxxxxxx X. Xxxxxx, Esquire
KROGER, GARDIS & XXXXX, L.L.P.
Bank One Center/Circle,Suite 900
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000 Ext. 926
Section 12. COSTS, EXPENSES AND TADS. The Company shall pay or reimburse
the Bank on demand for all reasonable out-of-pocket costs and expenses of the
Bank including reasonable attorneys' fees and legal expenses incurred by it in
connection with the drafting, negotiation, execution, and delivery of this
Agreement and the other Loan Documents, and in connection with the enforcement,
or restructuring in the nature of a workout, of this Agreement or any other Loan
Document. The Company shall also reimburse the Bank for expenses incurred by the
Bank in connection with any audit of the books and records or physical assets of
the Company conducted pursuant to any right granted to the Bank under the terms
of this Agreement or any other Loan Document. Such reimbursement shall include,
without limitation, reimbursement of the Bank for its overhead expenses
reasonably allocated to such audits. In addition, the Company shall pay or
reimburse the Bank for all expenses incurred by the Bank in connection with the
perfection of any security interests and liens granted to the Bank by the
Company and for any stamp or similar documentary or transaction taxes which may
be payable in connection with the execution or delivery of this Agreement or any
other Loan Document or in connection with any other instruments or documents
provided for herein or delivered or required in connection herewith. All
obligations provided for in this Section shall survive termination of this
Agreement and shall be joint and several obligations of the Company.
Section 13. SEVERABILITY. If any provision of this Agreement or any other
Loan Document is determined to be illegal or unenforceable, such provision shall
be deemed to be severable from the balance of the provisions of this Agreement
or such Document and the remaining provisions shall be enforceable in accordance
with their terms.
Section 14. CAPTIONS. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
Section 15. GOVERNING LAW - JURISDICTION. Except as may otherwise be
expressly provided in any other Loan Document, this Agreement and all other Loan
Documents are made under and will be governed in all cases by the substantive
laws of the State of Indiana, notwithstanding the fact that Indiana conflicts of
law rules might otherwise require the substantive rules of law of another
jurisdiction to apply. The Company consents to the jurisdiction of any state or
federal court located within Xxxxxx County, Indiana, and waive personal service
of any and all process upon them. All service of process may be made by
messenger, by certified mail, return receipt requested, or by registered mail
directed to the Company at the address stated in Section 11. The Company waives
any objection which it may have to any proceeding commenced in a federal or
state court located within Xxxxxx County, Indiana, based upon improper venue or
forum non convemens. Nothing contained in this Section shall affect the right of
the Bank to serve legal process in any other manner permitted by law or to bring
any action or proceeding against the Company or its property in the courts of
any other jurisdiction.
Section 16. PRIOR AGREEMENTS, ETC. This Agreement supersedes all previous
agreements and commitments made by the Bank and the Company with respect to the
Loan and all other subjects of this Agreement, including, without limitation,
any oral or written proposals or commitments made or issued by the Bank.
Section 17. SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding upon and shall inure to the benefit of the Company
and the Bank and their respective successors and assigns, provided that the
Company's rights under this Agreement shall not be assignable without the prior
written consent of the Bank.
Section 18. WAIVER OF JURY TRIAL. THE COMPANY AND THE BANK (BY ITS
ACCEPTANCE HEREOF) HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) BETWEEN THE COMPANY
AND THE BANK ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. THIS PROVISION IS A MATERIAL
INDUCEMENT TO THE BANK TO PROVIDE THE FINANCING EVIDENCED BY THIS AGREEMENT.
Section 19. ARBITRATION. BANK, THE COMPANY AND FAIR FINANCE AGREE THAT UPON
THE WRITTEN DEMAND OF ANY PARTY, WHETHER MADE BEFORE OR AFTER THE INSTITUTION OF
ANY LEGAL PROCEEDINGS, BUT PRIOR TO THE RENDERING OF ANY JUDGMENT IN THAT
PROCEEDING, ALL DISPUTES, CLAIMS AND CONTROVERSIES BETWEEN THEM, WHETHER
INDIVIDUAL, JOINT, OR CLASS IN NATURE, ARISING FROM THIS AGREEMENT, OR ANY LOAN
DOCUMENT OR OTHERWISE, INCLUDING WITHOUT LIMITATION CONTRACT AND TORT DISPUTES,
SHALL BE RESOLVED BY BINDING ARBITRATION PURSUANT TO THE COMMERCIAL RULES OF THE
AMERICAN ARBITRATION ASSOCIATION ("AAA"). ANY ARBITRATION PROCEEDING HELD
PURSUANT TO THIS ARBITRATION PROVISION SHALL BE CONDUCTED IN THE CITY NEAREST
THE COMPANY'S ADDRESS HAVING AN AAA REGIONAL OFFICE, OR AT ANY OTHER PLACE
SELECTED BY MUTUAL AGREEMENT OF THE PARTIES. NO ACT TO TAKE OR DISPOSE OF ANY
COLLATERAL SHALL CONSTITUTE A WAIVER OF THIS ARBITRATION AGREEMENT OR BE
PROHIBITED BY THIS ARBITRATION AGREEMENT.
THIS ARBITRATION PROVISION SHALL NOT LIMIT THE RIGHT OF EITHER PARTY DURING
ANY DISPUTE TO SEEK, USE, AND EMPLOY ANCILLARY OR PRELIMINARY RIGHTS AND/OR
REMEDIES, JUDICIAL OR OTHERWISE, FOR THE PURPOSES OF REALIZING UPON, PRESERVING,
PROTECTING, FORECLOSING UPON OR PROCEEDING UNDER FORCIBLE ENTRY AND DETAINER FOR
POSSESSION OF ANY REAL OR PERSONAL PROPERTY, AND ANY SUCH ACTION SHALL NOT BE
DEEMED AN ELECTION OF REMEDIES. SUCH REMEDIES INCLUDE, WITHOUT LDVffrATION,
OBTAINING INJUNCTIVE RELIEF OR A TEMPORARY RESTRAINING ORDER, INVOKING A POWER
OF SALE UNDER ANY DEED OF TRUST OR MORTGAGE; OBTAINING A WRIT OF ATTACHMENT OR
IMPOSITION OF A RECEIVERSHIP; OR EXERCISING ANY RIGHTS RELATING TO PERSONAL
PROPERTY, INCLUDING EXERCISING THE RIGHT OF SETOFF, OR TAKING OR DISPOSING OF
SUCH PROPERTY WITH OR WITHOUT JUDICIAL PROCESS PURSUANT TO THE UNIFORM
COMMERCIAL CODE. ANY DISPUTES, CLAIMS, OR CONTROVERSIES CONCERNING THE
LAWFULNESS OR REASONABLENESS OF ANY ACT, OR EXERCISE OF ANY RIGHT OR REMEDY,
CONCERNING ANY COLLATERAL, INCLUDING ANY CLAIM TO RESCIND, REFORM, OR OTHERWISE
MODIFY ANY AGREEMENT RELATING TO THE COLLATERAL, SHALL ALSO BE ARBITRATED;
PROVIDED, HOWEVER THAT NO ARBITRATOR SHALL HAVE THE RIGHT OR THE POWER TO ENJOIN
OR RESTRAIN ANY ACT OF ANY PARTY. JUDGMENT UPON ANY AWARD RENDERED BY ANY
ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THE STATUTE OF
LIMITATIONS, ESTOPPEL, WAIVER, LACHES AND SIMILAR DOCTRINES WHICH WOULD
OTHERWISE BE APPLICABLE IN AN ACTION BROUGHT BY A PARTY SHALL BE APPLICABLE IN
ANY ARBITRATION PROCEEDING, AND THE COMMENCEMENT OF AN ARBITRATION PROCEEDING
SHALL BE DEEMED THE COMMENCEMENT OF ANY ACTION FOR THESE PURPOSE. THE FEDERAL
ARBITRATION ACT (TITLE 9 OF THE UNITED STATES CODE) SHALL APPLY TO THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT OF THIS ARBITRATION PROVISION.
[THIS SPACE LEFT BLANK INTENTIONALLY]
Dated as of December 18, 2002.
DC INVESTMENTS LEASING, LLC,
a Mississippi limited liability company
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx, Manager
FIRST INDIANA BANK,
a national banking association
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxxx, Vice President
FIRST INDIANA BANK,
a national banking association
By:
------------------------------------
Xxxxxxx X. Xxxxxxxxx, Vice President
FAIR HOLDINGS, INC., an Ohio corporation
By:
------------------------------------
Xxxxxxx X. Xxxxxx, Chairman of the
Board and Chief Financial Officer
SCHEDULE OF EXHIBITS
SCHEDULE I
Exhibit "A" Officer's Certificate
Exhibit "B" Promissory Note (Term Loan) ($2,741,867.00)
Exhibit "C-1" Schedule of Exceptions (DC Investments Leasing, LLC)
Exhibit "C-2" Schedule of Exceptions (Fair Holdings, Inc.)
Exhibit "C-3" Schedule of Exceptions (Fair Finance Company)
Exhibit "C-4" Schedule of Exceptions (DC Investments, LLC)
Exhibit "D" [Reserved]
Exhibit "E" Collateral Assignment of Management Agreement (DC
Investments Leasing, LLC, Pyramid Coach, Inc. and First
Indiana Bank, N.A
Exhibit "F" Guaranty Agreement (DC Investments, LLC)
Exhibit "G" Guaranty Agreement (Fair Holdings, Inc.)
Exhibit "H" Guaranty Agreement (Fair Finance Company)
Exhibit "I" Guaranty Agreement (Xxxxxxx X. Xxxxxx)
Exhibit "J" Guaranty Agreement (Xxxxx Xxxxxxx)
Exhibit "K" Security Agreement (Motor Vehicles) (DC Investments
Leasing, LLC)
Exhibit "L" Pledge Agreement (DC Investments, LLC)
Exhibit "M" Subordination Agreement (DC Investments Leasing, LLC, Fair
Holdings, Inc., and First Indiana Bank, N.A.)
