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Exhibit 4.2
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF FEBRUARY 27, 1998
AMONG
ASSET ALLIANCE CORPORATION
ASSET ALLIANCE HOLDING CORP.
AND
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
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TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS....................................................................................1
1.1 Certain Defined Terms..................................................................................1
1.2 Other Interpretive Provisions.........................................................................14
1.3 Accounting Principles.................................................................................15
ARTICLE II THE CREDIT....................................................................................15
2.1 Amounts and Terms of the Facilities...................................................................15
2.1.1 Amounts and Terms of Facility A Loan..................................................................15
2.1.2 Amounts and Terms of Facility B Loan..................................................................15
2.2 Loan Accounts.........................................................................................15
2.3 Procedure for Borrowing...............................................................................16
2.4 Conversion and Continuation Elections.................................................................17
2.5 Repayments............................................................................................18
2.6 Prepayments...........................................................................................18
2.7 Interest..............................................................................................19
2.8 Fees ................................................................................................20
2.9 Computation of Fees and Interest......................................................................20
2.10 Payments by the Borrowers............................................................................20
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY..........................................................21
3.1 Taxes.................................................................................................21
3.2 Illegality............................................................................................22
3.3 Increased Costs and Reduction of Return...............................................................22
3.4 Funding Losses........................................................................................23
3.5 Inability to Determine Rates..........................................................................24
3.6 Certificates of Bank..................................................................................24
3.7 Survival..............................................................................................24
ARTICLE IV CONDITIONS PRECEDENT.............................................................................24
4.1 Conditions of ........................................................................................24
4.2 Conditions to All Borrowings..........................................................................27
ARTICLE V REPRESENTATIONS AND WARRANTIES....................................................................28
5.1 Corporate Existence and Power.........................................................................28
5.2 Corporate Authorization; No Contravention.............................................................28
5.3 Governmental Authorization............................................................................29
5.4 Binding Effect........................................................................................29
5.5 Litigation............................................................................................29
5.6 No Default............................................................................................30
5.7 Employee Benefit Plans................................................................................30
5.8 Use of Proceeds; Margin Regulations...................................................................30
5.9 Title to Properties...................................................................................30
5.10 Taxes.................................................................................................30
5.11 Financial Condition...................................................................................30
5.12 Environmental Matters.................................................................................31
5.13 Regulated Entities....................................................................................31
5.14 No Burdensome Restrictions............................................................................31
5.15 Copyrights, Patents, Trademarks and Licenses, Etc.....................................................31
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5.16 Subsidiaries...........................................................................................32
5.17 Insurance..............................................................................................32
5.18 Full Disclosure........................................................................................32
5.19 Material Agreements....................................................................................32
5.20 Capitalization.........................................................................................32
ARTICLE VI AFFIRMATIVE COVENANTS............................................................................33
6.1 Financial Statements...................................................................................33
6.2 Certificates; Other Information........................................................................34
6.3 Notices................................................................................................34
6.4 Preservation of Corporate Existence, Etc...............................................................35
6.5 Maintenance of Property................................................................................36
6.6 Insurance..............................................................................................36
6.7 Payment of Obligations.................................................................................36
6.8 Compliance with Laws...................................................................................36
6.9 Compliance with ERISA..................................................................................36
6.10 Inspection of Property and Books and Records...........................................................37
6.11 Environmental Laws.....................................................................................37
6.12 Initial Use of Proceeds................................................................................37
ARTICLE VII NEGATIVE COVENANTS..............................................................................37
7.1 Limitation on Liens....................................................................................37
7.2 Consolidations and Mergers.............................................................................38
7.3 Transactions with Affiliates...........................................................................38
7.4 Use of Proceeds........................................................................................38
7.5 ERISA .................................................................................................39
7.6 Change in Business.....................................................................................39
7.7 Accounting Changes.....................................................................................39
7.8 Financial Covenants....................................................................................39
7.9 Indebtedness...........................................................................................39
ARTICLE VIII EVENTS OF DEFAULT..............................................................................40
8.1 Event of Default.......................................................................................40
8.2 Remedies...............................................................................................42
8.3 Rights Not Exclusive...................................................................................43
ARTICLE IX MISCELLANEOUS....................................................................................43
9.1 Amendments and Waivers.................................................................................43
9.2 Notices................................................................................................43
9.3 No Waiver; Cumulative Remedies.........................................................................44
9.4 Costs and Expenses.....................................................................................45
9.5 Indemnity..............................................................................................45
9.6 Payments Set Aside.....................................................................................45
9.7 Successors and Assigns.................................................................................46
9.8 Assignments, Participations, Etc.......................................................................46
9.9 Confidentiality........................................................................................47
9.10 Set-off................................................................................................48
9.11 Counterparts...........................................................................................48
9.12 Severability...........................................................................................48
9.13 No Third Parties Benefited.............................................................................48
9.14 Joint and Several Liability............................................................................48
9.15 Governing Law and Jurisdiction.........................................................................50
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Section Page
9.16 Waiver of Jury Trial...................................................................................51
9.17 Entire Agreement.......................................................................................51
9.18 Initial Public Offering by the Company..................................................................51
SCHEDULES
Schedule 5.16 Subsidiaries and Minority Interests
Schedule 5.20 Capitalization
Schedule 7.1 Existing Liens
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Legal Opinion of Company's Counsel
Exhibit E Form of Promissory Note
Exhibit F Form of Warrant
Exhibit G Form of Guaranty
Exhibit H-1 Form of Pledge Agreement
Exhibit H-2 Form of LLC Pledge Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of
February 27, 1998, among ASSET ALLIANCE CORPORATION, a Delaware corporation (the
"Company"), ASSET ALLIANCE HOLDING CORP., a Delaware corporation ("Holding";
together with the Company, the "Borrowers") and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION(the "Bank").
WHEREAS, the Company, Holding and the Bank have entered into a Credit
Agreement, dated as of May 27, 1997 (the "Existing Agreement");
WHEREAS, the parties hereto have agreed to amend and restate the
Existing Agreement so as to, among other things, (a) replace the existing
revolving credit facility with a two year term loan facility and a five year
term loan facility and (b) amend certain covenants and other provisions of the
Existing Agreement.
WHEREAS, the parties hereto intend that this Agreement and the
documents executed in connection herewith not effect a novation of the
obligations of the Company under the Existing Agreement, but merely a
restatement and, where applicable, an amendment of the terms governing such
obligations;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the Existing Agreement is amended and restated in its entirety, and the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms have the
following meanings:
"Acquisition" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly,
in (a) the acquisition of all or any substantial part of the assets of
a Person, or of any business or division of a Person, or (b) the
acquisition of capital stock, partnership interests or equity of any
Person, or otherwise causing any Person to become a Subsidiary.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. A Person shall be deemed to control
another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and
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policies of the other Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Agreement" means this Amended and Restated Credit
Agreement.
"Applicable Margin" means: (a) with respect to Facility
A Loans, 1.25%; and (b) with respect to Facility B Loans,
.50%.
"Assignee" has the meaning specified in subsection
9.8(a).
"Attorney Costs" means and includes all fees and disbursements
of any law firm or other external counsel, the non duplicative
allocated cost of internal legal services and all disbursements of
internal counsel.
"Bank" has the meaning specified in the introductory
clause hereto.
"Bankruptcy Code" means the Federal Bankruptcy Reform
Act of 1978 (11 U.S.C. Section 101, et seq.).
"Borrowing" means a borrowing hereunder consisting of a Loan
made to the Borrowers by the Bank under Article II.
"Borrowing Date" means any date on which a Borrowing occurs
under Section 2.3.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in Chicago are authorized or
required by law to close and, if the applicable Business Day relates to
any Offshore Rate Loan, means such a day on which dealings are carried
on in the applicable offshore dollar interbank market.
"Calculation Period" means as of the end of any fiscal
quarter, the four quarter period then ending; provided that any
Subsidiary acquired during such four quarter period shall be treated as
if such Subsidiary had been acquired on the first day of such four
quarter period.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Change of Control" means (a) any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions)
of all, or substantially all, of the assets of the Company; (b) any
"person" as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of
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1934, as amended (the "Exchange Act") other than Gallagher and its
Subsidiaries, is or becomes, directly or indirectly, the "beneficial
owner," as defined in Rule 13d-3 under the Exchange Act, of securities
of the Company that represent 20% or more of the combined voting power
of the Company's then outstanding securities and such person shall be a
beneficial owner of a greater percentage of such securities than
Gallagher; or (c) a majority of the members of the Company's Board of
Directors are persons who are then serving on the Board of Directors
without having been elected by the Board of Directors or having been
nominated for election by its shareholders.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, and
regulations promulgated thereunder.
"Collateral" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by either Borrower in
or upon which a Lien now or hereafter exists in favor of the Bank,
whether under this Agreement or under any other documents executed by
any such Person and delivered to the Bank.
"Collateral Documents" means the Pledge Agreement and all
documents delivered pursuant to Section 4.2(d) hereof pursuant to which
the Bank shall have a security interest in the Collateral.
"Commitment Termination Date" means the earlier to
occur of:
(a) the Second Draw Cut-Off Date; and
(b) the date on which any Termination Event occurs.
"Consolidated Net Worth" means, for any period, the sum of the
consolidated net worth of the Company and its Subsidiaries, as
calculated in accordance with GAAP.
"Contingent Obligation" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or
without recourse, (a) with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary
obligations") of another Person (the "primary obligor"), including any
obligation of that Person (i) to purchase, repurchase or otherwise
acquire such primary obligations or any security therefor, (ii) to
advance or provide funds for the payment or discharge of any such
primary obligation, or to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency
or any balance sheet item, level of income or financial condition of
the primary
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obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of
the ability of the primary obligor to make payment of such primary
obligation, or (iv) otherwise to assure or hold harmless the holder of
any such primary obligation against loss in respect thereof (each, a
"Guaranty Obligation"); (b) with respect to any Surety Instrument
issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments; or (c) to
purchase any materials, supplies or other property from, or to obtain
the services of, another Person if the relevant contract or other
related document or obligation requires that payment for such
materials, supplies or other property, or for such services, shall be
made regardless of whether delivery of such materials, supplies or
other property is ever made or tendered, or such services are ever
performed or tendered. The amount of any Contingent Obligation shall,
in the case of Guaranty Obligations, be deemed equal to the stated or
determinable amount of the primary obligation in respect of which such
Guaranty Obligation is made or, if not stated or if indeterminable, the
maximum reasonably anticipated liability in respect thereof, and in the
case of other Contingent Obligations, shall be equal to the maximum
reasonably anticipated liability in respect thereof.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person is a party or by
which it or any of its property is bound.
"Controlled Group" means the Company and any corporation,
trade or business that is, along with the Company, a member of a
controlled group of corporations or a controlled group of trades or
businesses as described in sections 414(b) and 414(c), respectively, of
the Code or in section 4001 of ERISA.
"Conversion/Continuation Date" means any date on which, under
Section 2.4, the Company (a) converts Loans of one Type to another
Type, or (b) continues as Loans of the same Type, but with a new
Interest Period, Loans having Interest Periods expiring on such date.
"Debt Service" means as of any applicable date of
determination and as determined in accordance with GAAP, all principal
and interest payments on all outstanding Indebtedness.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied during such time) constitute an Event of Default.
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"Dollars", "dollars" and "$" each mean lawful money of
the United States.
"EBITDA" means, as of any applicable date of determination and
as determined in accordance with GAAP, net income plus interest
expense, tax expense, depreciation and amortization expenses.
"Environmental Claims" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential liability
or responsibility for violation of any Environmental Law, or for
release of any hazardous substance, waste or material into, or injury
to, the environment.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental,
health, safety and land use matters.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, together
with the regulations promulgated thereunder and under the Code, in each
case as in effect from time to time. References to sections of ERISA
also refer to successor sections.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning
of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of
the Code for purposes of provisions relating to Section 412 of the
Code).
"Eurodollar Reserve Percentage" has the meaning specified in
the definition of "Offshore Rate".
"Event of Default" means any of the events or circumstances
specified in Section 8.1.
"Exchange Act" means the Securities and Exchange Act of 1934,
and regulations promulgated thereunder.
"Facility A Loan Amount" means $10,000,000.
"Facility A Loan Commitment" means the Bank's obligation to
make the second Facility A Loan pursuant to Section 2.1.1.
"Facility A Loan Commitment Amount" means $10,000,000 until
the earlier of (i) the second Borrowing under Section 2.1.1 and Section
2.1.2 and (ii) the Second Draw Cut-Off Date, and $0 thereafter.
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"Facility A Loans" means an extension of credit by the Bank to
the Borrower under Section 2.1.1.
"Facility B Loan Amount" means $20,000,000.
"Facility B Loan Commitment" means the Bank's obligation to
make the second Facility B Loan pursuant to Section 2.1.2.
"Facility B Loan Commitment Amount" means $20,000,000 until
the earlier of (i) the second Borrowing under Section 2.1.1 and Section
2.1.2 and (ii) the Second Draw Cut-Off Date, and $0 thereafter.
"Facility B Loans" means an extension of credit by the Bank to
the Borrower under Section 2.1.2.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of New
York (including any such successor, "H.15(519)") on the preceding
Business Day opposite the caption "Federal Funds (Effective)"; or, if
for any relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the arithmetic
mean as determined by the Bank of the rates for the last transaction in
overnight Federal funds arranged prior to 9:00 a.m. (New York City
time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Bank.
"Federal Funds Rate Loan" means a Loan that bears interest
based on the Federal Funds Rate.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date
of the financial statements referred to in Section 5.11(a) hereof.
"Gallagher" means Xxxxxx X. Xxxxxxxxx & Co.
"Gallagher Credit Agreement" means the Credit Agreement dated
as of February 16, 1993 among Xxxxxx X. Xxxxxxxxx &
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Co., certain lenders and Continental Bank N.A., as agent, as heretofore
amended.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guaranty" means a guaranty and purchase agreement executed by
Gallagher in favor of the Bank, in the form of Exhibit G, as amended or
otherwise modified from time to time.
"Guaranty Obligation" has the meaning specified in the
definition of "Contingent Obligation."
"Indebtedness" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations issued,
undertaken or assumed as the deferred purchase price of property or
services (other than trade payables entered into in the ordinary course
of business on ordinary terms); (c) all non-contingent reimbursement or
payment obligations with respect to Surety Instruments; (d) all
obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case
with respect to property acquired by the Person (even though the rights
and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property); (f) all
obligations with respect to capital leases; (g) all net obligations
with respect to Swap Contracts; (h) all indebtedness referred to in
clauses (a) through (g) above secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien upon or in property (including accounts and
contracts rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness; and (i)
all Guaranty Obligations in respect of indebtedness or obligations of
others of the kinds referred to in clauses (a) through (g) above.
"Indemnified Liabilities" has the meaning specified in
Section 9.5.
"Indemnified Person" has the meaning specified in
Section 9.5.
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"Independent Auditor" has the meaning specified in
subsection 6.1(a).
"Insolvency Proceeding" means (a) any case, action or
proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, rehabilitation, insolvency, liquidation,
receivership, dissolution, winding-up or relief of debtors, or (b) any
general assignment for the benefit of creditors, composition,
marshalling of assets for creditors, or other, similar arrangement in
respect of its creditors generally or any substantial portion of its
creditors; undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code.
"Interest Payment Date" means, as to any Loan other than a
Federal Funds Rate Loan, the last day of each Interest Period
applicable to such Loan and, as to any Federal Funds Rate Loan, the
last Business Day of each calendar quarter and each date such Loan is
converted into another Type of Loan, provided, however, that if any
Interest Period for an Offshore Rate Loan exceeds three months the date
that falls three months after the beginning of such Interest Period and
after each Interest Payment Date thereafter is also an Interest Payment
Date.
"Interest Period" means, as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two,
three or six months thereafter as selected by the applicable Borrower
in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless the result of
such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period
shall end on the preceding Business Day;
(ii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest
Period; and
(iii) no Interest Period for any Loan shall extend
beyond the Stated Maturity Date.
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"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Lending Office" means the office of the Bank specified in
Schedule 9.2, or such other office or offices as the Bank may from time
to time notify the Company.
"Lien" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale or
other title retention agreement, the interest of a lessor under a
capital lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as
debtor, under the Uniform Commercial Code or any comparable law) and
any contingent or other agreement to provide any of the foregoing, but
not including the interest of a lessor under an operating lease.
"LLC Pledge Agreement" means a pledge agreement of
Merger Co. in the form of Exhibit H-2, as amended or
otherwise modified from time to time.
"Loan" means a Facility A Loan or a Facility B Loan.
"Loan Documents" means this Agreement, any Notes, the
Collateral Documents, the Warrant Documents, and all other documents
delivered to the Bank in connection herewith.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse impact upon, the operations, business,
properties, financial condition or prospects of the Company or the
Company and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of either Borrower to perform under any Loan
Document and to avoid any Event of Default; or (c) a material adverse
impact upon the legality, validity, binding effect or enforceability
against either Borrower of any Loan Document.
"Merger Co." means Asset Alliance Bricoleur Merger Co.,
a Delaware corporation.
"Multiemployer Plan" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which the Company or any
Subsidiary makes, is making, or is obligated to make contributions or,
has made, or been obligated to make, contributions.
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"Note" means a promissory note executed by the Borrowers in
favor of the Bank pursuant to subsection 2.2(b), in substantially the
form of Exhibit E.
"Notice of Borrowing" means a duly completed notice by the
Company in substantially the form of Exhibit A.
"Notice of Conversion/Continuation" means a duly completed
notice by the Company in substantially the form of Exhibit B.
"Obligations" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan Document owing
by the Borrowers to the Bank or any Indemnified Person, whether direct
or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising.
"Offshore Rate" means, for any Interest Period, with respect
to Offshore Rate Loans, the rate of interest per annum (rounded upward
to the next 1/16th of 1%) determined by the Bank as follows:
Offshore Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for
any Interest Period the maximum reserve percentage (expressed
as a decimal, rounded upward to the next 1/16th of 1%) in
effect on such day (whether or not applicable to the Bank)
under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"); and
"LIBOR" means the rate of interest per annum
determined by the Bank to be the rate of interest at which
dollar deposits in the approximate amount of the amount of the
Loan to be made or continued as, or converted into, an
Offshore Rate Loan by the Bank and having a maturity
comparable to such Interest Period would be offered to major
banks in the London interbank market at their request at
approximately 11:00 a.m. (London time) two Business Days prior
to the commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as
to all Offshore Rate Loans then outstanding as of the
effective date of any change in the Eurodollar Reserve
Percentage.
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"Offshore Rate Loan" means a Loan that bears interest based on
the Offshore Rate.
"Organization Documents" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate
of determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement, and
all applicable resolutions of the board of directors (or any committee
thereof) of such corporation.
"Other Taxes" means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Documents.
"Participant" has the meaning specified in subsection
9.8(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
"Performance Fees" means fees and allocations paid directly or
indirectly to either Borrower by an investment fund based on the
performance of such fund.
"Permitted Liens" has the meaning specified in Section
7.1.
"PERSI" means a preferred equity revenue sharing interest
acquired by a Borrower in an investment advisory firm which entitles
such Borrower to an interest in the gross revenues of such investment
advisory firm.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association,
limited liability company, joint venture or Governmental Authority.
"Plan" means any "employee pension benefit plan", as such term
is defined in ERISA, which is subject to Title IV of ERISA (other than
a "Multiemployer Plan"), and as to which any entity in the Controlled
Group has or may have any liability, including any liability by reason
of having been a substantial employer within the meaning of section
4063 of ERISA for any time within the preceding five years or by reason
of being deemed to be a contributing sponsor under section 4069 of
ERISA.
"Pledge Agreement" means a pledge agreement of the Company, in
the form of Exhibit H-1, as amended or otherwise modified from time to
time.
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"Reportable Event" means, any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of
an arbitrator or of a Governmental Authority, in each case applicable
to or binding upon the Person or any of its property or to which the
Person or any of its property is subject.
"Responsible Officer" means the chief executive officer or the
president of the Company, or any other officer having substantially the
same authority and responsibility; or, with respect to compliance with
financial covenants, the chief financial officer or the treasurer of
the Company, or any other officer having substantially the same
authority and responsibility.
"SEC" means the Securities and Exchange Commission, or
any Governmental Authority succeeding to any of its
principal functions.
"Second Draw Cut-Off Date" means February 27, 2000.
"Stated Maturity Date" means February 27, 2003.
"Subsidiary" of a Person means any corporation, association,
partnership, joint venture or other business entity of which more than
50% of the voting stock or other equity interests (in the case of
Persons other than corporations), is owned or controlled directly or
indirectly by the Person, or one or more of the Subsidiaries of the
Person, or a combination thereof. Unless the context otherwise clearly
requires, references herein to a "Subsidiary" refer to a Subsidiary of
the Company.
"Subsidiary Stock Value" for any Subsidiary means the product
of (i) EBITDA for the four most recent consecutive fiscal quarters of
such Subsidiary multiplied by (ii) 5.
"Surety Instruments" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties,
shipside bonds, surety bonds and similar instruments.
"Swap Contract" means any agreement (including any master
agreement and any agreement, whether or not in writing, relating to any
single transaction) that is an interest rate swap agreement, basis
swap, forward rate agreement, commodity swap, commodity option, equity
or equity index swap or option, bond option, interest rate option,
forward foreign exchange agreement, rate cap, collar
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or floor agreement, currency swap agreement, cross-currency rate swap
agreement, swaption, currency option or any other, similar agreement
(including any option to enter into any of the foregoing).
"Taxes" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding such taxes (including income taxes or
franchise taxes) as are imposed on or measured by the Bank's net income
by the jurisdiction (or any political subdivision thereof) under the
laws of which the Bank is organized or maintains a lending office.
"Termination Event" means (a) the occurrence of a Default
described in Section 8.1(f) or (g) or (b) the occurrence and
continuance of any other Event of Default and either (i) the Loans are
declared to be due and payable pursuant to Section 8.2, or (ii) the
Bank gives notice to the Borrower that the Commitments have been
terminated.
"Type" means either a Federal Funds Rate Loan or an
Offshore Rate Loan.
"United States" and "U.S." each means the United States
of America.
"Warrant" means a warrant of the Company, in the form of
Exhibit F with respect to 10,000 shares of capital stock of the Company
with a strike price of $12.50 per share.
"Warrant Document" means the Warrant and each other document
executed or delivered by the Company pursuant to the Warrant.
"Welfare Plan" means any "employee welfare benefit plan" as
such term is defined in ERISA, as to which either Borrower has any
liability.
"Wholly-Owned Subsidiary" means any corporation in which
(other than directors' qualifying shares required by law) 100% of the
capital stock of each class having ordinary voting power, and 100% of
the capital stock of every other class, in each case, at the time as of
which any determination is being made, is owned, beneficially and of
record, by the Company, or by one or more of the other Wholly-Owned
Subsidiaries, or both.
1.2 Other Interpretive Provisions. (a) The meanings of
defined terms are equally applicable to the singular and plural
forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and subsection, Section,
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Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and
means "including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications thereto,
but only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document, and (ii) references to any statute
or regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
1.3 Accounting Principles. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Company.
ARTICLE II
THE CREDIT
2.1 Amounts and Terms of the Facilities
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2.1.1 Amounts and Terms of Facility A Loan. The Bank agrees, on the
terms and conditions set forth herein, to make loans to the Borrowers (each such
loan, a "Facility A Loan"). The Bank agrees to make the first such loan on the
Closing Date in an amount up to $5,000,000. The Bank agrees to make additional
loans no later than the Commitment Termination Date in amounts aggregating no
greater than $10,000,000 less the amount of the initial Facility A Loan. The
amount of Facility A Loans outstanding shall at no time exceed the Facility A
Loan Amount. Upon the occurrence of the Commitment Termination Date, the
Facility A Loan Commitment shall terminate automatically and without any further
action. Amounts borrowed as Facility A Loans which are repaid or prepaid by the
Borrower may not be reborrowed, and shall permanently reduce the Facility A Loan
Commitment Amount.
2.1.2 Amounts and Terms of Facility B Loan. The Bank agrees, on the
terms and conditions set forth herein, to make loans to the Borrowers (each such
loan, a "Facility B Loan"). The Bank agrees to make the first such loan on the
Closing Date in an amount up to $10,000,000. The Bank agrees to make additional
loans no later than the Commitment Termination Date in amounts aggregating no
greater than $20,000,000 less the amount of the initial Facility B Loan. The
amount of Facility B Loans outstanding shall at no time exceed the Facility B
Loan Amount. Upon the occurrence of the Commitment Termination Date, the
Facility B Loan Commitment shall terminate automatically and without any further
action. Amounts borrowed as Facility B Loans which are repaid or prepaid by the
Borrower may not be reborrowed, and shall permanently reduce the Facility B Loan
Commitment Amount.
2.2 Loan Accounts. (a) The Loans made by the Bank shall be evidenced by
one or more loan accounts or records maintained by the Bank in the ordinary
course of business. The loan accounts or records maintained by the Bank shall be
conclusive absent manifest error of the amount of the Loans made by the Bank to
the Borrowers and the interest and payments thereon. Any failure so to record or
any error in doing so shall not, however, limit or otherwise affect the
obligation of the Company hereunder to pay any amount owing with respect to the
Loans.
(b) Upon the request of the Bank, the Loans made by the Bank
may be evidenced by one or more Notes, instead of loan accounts. The Bank shall
endorse on the schedules annexed to the Note(s) the date, amount and maturity of
each Loan made by it and the amount of each payment of principal made by the
Borrowers with respect thereto. The Bank is irrevocably authorized by the
Borrowers to endorse the Note(s) and the Bank's record shall be conclusive
absent manifest error; provided, however, that the failure of the Bank to make,
or an error in making, a notation thereon with respect to any Loan shall not
limit or otherwise affect the obligations of the Borrowers hereunder or under
any such Note to the Bank.
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2.3 Procedure for Borrowing. (a) Each Borrowing shall be made upon the
Company's irrevocable written notice delivered to the Bank in the form of a
Notice of Borrowing (which notice must be received by the Bank prior to 10:00
a.m. (Chicago time) (i) three Business Days prior to the requested Borrowing
Date, in the case of Offshore Rate Loans; and (ii) on the requested Borrowing
Date, in the case of Federal Funds Rate Loans, specifying:
(A) the amount of the Borrowing, which shall be in
the amounts specified in Section 2.1.1 and 2.1.2 and in a
minimum amount for each Loan not less than $500,000;
(B) the requested Borrowing Date, which shall be a
Business Day;
(C) the Type of Loans comprising the Borrowing;
(D) the duration of the Interest Period applicable to
such Loans included in such notice. If the Notice of Borrowing
fails to specify the duration of the Interest Period for any
Borrowing comprised of Offshore Rate Loans, such Interest
Period shall be three months; and
(E) the Borrower to which the proceeds of the
Borrowing should be advanced.
(b) The Bank will make the amount of each Borrowing available
to the Borrower specified in the Notice of Borrowing by crediting the account of
such Borrower on the books of the Bank with the amount of each Borrowing.
(c) After giving effect to any Borrowing, there may not be
more than three different Interest Periods in effect.
(d) Each Borrowing shall consist of Facility A Loans and
Facility B Loans with the amount of the Facility B Loans being twice the amount
of the Facility A Loans.
2.4 Conversion and Continuation Elections. (a) Either Borrower may,
upon irrevocable written notice to the Bank if accordance with subsection
2.4(b):
(i) elect, as of any Business Day, in the case of
Federal Funds Rate Loans, or as of the last day of the applicable
Interest Period, in the case of Offshore Rate Loans, to convert any
such Loans (or any part thereof in an amount not less than $500,000, or
that is in an integral multiple of $50,000 in excess thereof) into
Loans of any other type; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any Loans having Interest
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Periods expiring on such day (or any part thereof in an amount not less
than $500,000, or that is in an integral multiple of $50,000 in excess
thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $500,000 such Offshore Rate Loans shall
automatically convert into Federal Funds Rate Loans, and on and after such date
the right of the Borrowers to continue such Loans as, and convert such Loans
into, Offshore Rate Loans shall terminate.
(b) The Company shall deliver a Notice of
Conversion/Continuation to be received by the Bank not later than 10:00 a.m.
(Chicago time) at least (i) three Business Days in advance of the
Conversion/Continuation Date, if the Loans are to be converted into or continued
as Offshore Rate Loans; and (ii) on the Conversion/Continuation Date, if the
Loans are to be converted into Federal Funds Rate Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or
renewed;
(C) the Type of Loans resulting from the proposed
conversion or continuation; and
(D) other than in the case of conversions into
Federal Funds Rate Loans, the duration of the requested
Interest Period.
(c) If upon the expiration of any Interest Period applicable
to Offshore Rate Loans the Company has failed to select timely a new Interest
Period to be applicable to such Offshore Rate Loans, or if any Default or Event
of Default then exists, the Company shall be deemed to have elected to convert
such Offshore Rate Loans into Federal Funds Rate Loans effective as of the
expiration date of such Interest Period.
(d) Unless the Bank otherwise agrees, during the existence of
a Default or Event of Default, the Company may not elect to have a Loan
converted into or continued as an Offshore Rate Loan.
(e) Notwithstanding anything herein to the contrary, during
the existence of a Default or an event of Default, unless the Bank otherwise
agrees, all outstanding Offshore Rate Loans shall be redenominated and converted
into Federal Funds Rate Loans in Dollars on the last day of the Interest Period
applicable to any such Offshore Rate Loans.
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(f) After giving effect to any conversion or continuation of
Loans, there may not be more than three different Interest Periods in effect.
2.5 Repayments. The Borrower shall, on each date set forth below, make
a scheduled repayment of the aggregate outstanding principal amount, in the
principal amounts for each Facility set forth below opposite such date:
Facility A Facility B
---------- ----------
2/27/99 $5,000,000 $ -0-
2/27/00 $5,000,000 $ -0-
2/27/01 $0 $6,666,666.66
2/27/02 $0 $6,666,666.66
2/27/03 $0 $6,666,666.67
Any repayments made by the Borrower pursuant to this Section 2.5 shall
be applied first to the Facility A Loans provided however, if the Borrower fails
to make a scheduled payment under this Section 2.5 and a repayment is made by
Xxxxxxxxx on behalf of the Borrower pursuant to Xxxxxxxxx'x obligations under
the Guaranty, such repayment shall be applied first to the Facility B Loans.
2.6 Prepayments. Subject to Section 3.4, the Borrowers may, at any time
or from time to time, upon not less than three Business Days' irrevocable notice
to the Bank from the Company, ratably prepay Loans in whole or in part, in
minimum amounts of $100,000 or any multiple of $50,000 in excess thereof. Such
notice of prepayment shall specify the date and amount of such prepayment and
the Type(s) of Loans to be prepaid. If such notice is given by the Company, the
Borrowers shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein, together with
accrued interest to each such date on the amount prepaid and any amounts
required pursuant to Section 3.4. Any prepayment of the Loans under this Section
2.6(a) (except any prepayment made by Xxxxxxxxx out of its own funds) shall be
applied, first to the Facility A Loans, to the unpaid installments of Facility A
Loans in inverse order of their maturities and second to the unpaid installments
of the Facility B Loans in inverse order of their maturities. Any prepayments
made by Xxxxxxxxx out of its own funds shall be applied to either the Facility A
Loans or the Facility B Loans, as specified by Xxxxxxxxx, and as to the
installments of either Loan in the inverse order of their maturities.
2.7 Interest. (a) Each Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date at a rate per annum
equal to the Offshore Rate, or the Federal Funds Rate, as the case may be (and
subject to the Company's right to convert to other Types of Loans under Section
2.4), plus the Applicable Margin. Any payments of interest in part, shall be
applied first to the Facility A Loans, except
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payments made by Xxxxxxxxx pursuant to its Guaranty which shall be applied as
directed by Xxxxxxxxx.
(b) Interest on each Loan shall be paid in arrears on each
Interest Payment Date and on the Stated Maturity Date. Interest shall also be
paid on the date of any prepayment of Loans under Section 2.6 for the portion of
the Loans so prepaid and upon payment (including prepayment) in full thereof
and, during the existence of any Event of Default, interest shall be paid on
demand of the Bank.
(c) Notwithstanding subsection (a) of this Section, while any
Event of Default exists or after acceleration, the Borrowers shall pay interest
(after as well as before entry of judgment thereon to the extent permitted by
law) on the principal amount of all outstanding Loans, at a rate per annum which
is determined by adding 2% per annum to the Applicable Margin then in effect for
such Loans; provided, however, that, on and after the expiration of any Interest
Period applicable to any Offshore Rate Loan outstanding on the date of
occurrence of such Event of Default or acceleration, the principal amount of
such Loan shall, during the continuation of such Event of Default or after
acceleration, bear interest at a rate per annum equal to the Federal Funds Rate
plus the Applicable Margin for Federal Funds Rate Loan plus 2%.
(d) Anything herein to the contrary notwithstanding, the
obligations of the Borrowers to the Bank hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by the Bank would be contrary to
the provisions of any law applicable to the Bank limiting the highest rate of
interest that may be lawfully contracted for, charged or received by the Bank,
and in such event the Borrowers shall pay the Bank interest at the highest rate
permitted by applicable law.
2.8 Fees. (a) On the Closing Date, the Borrowers shall deliver to the
Bank the Warrant Documents duly executed and registered in the name of the Bank
or such Affiliates of the Bank as the Bank shall designate.
(b) The Borrower shall pay to the Bank a commitment fee on the
average daily unused portion of the Facility A Commitment and Facility B
Commitment, computed on a quarterly basis in arrears based upon the daily
utilization for that quarter as calculated by the Bank, equal to 0.25 percent
per annum. Such commitment fee shall accrue from the dated hereof to the
Commitment Termination Date and shall be due and payable quarterly in arrears on
the last Business Day of each calendar quarter through the Commitment
Termination Date, with the final payment to be made on the Commitment
Termination Date. The commitment fees provided in this subsection shall accrue
at all times after the above-mentioned commencement date, including
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at any time during which one or more conditions in Article IV are not met.
2.9 Computation of Fees and Interest. (a) All computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more interest being paid than if computed on the basis of a
365-day year). Interest and fees shall accrue during each period during which
interest or such fees are computed from the first day thereof to the last day
thereof.
(b) Each determination of an interest rate by the Bank shall
be conclusive and binding on the Borrowers in the absence of manifest error.
2.10 Payments by the Borrowers. (a) All payments to be made by the
Borrowers shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Borrowers shall be made
to the Bank at the Bank's Lending Office, and shall be made in dollars and in
immediately available funds, no later than 11:00 a.m. (Chicago time) on the date
specified herein. Any payment received by the Bank later than 11:00 a.m.
(Chicago time) shall be deemed to have been received on the following Business
Day and any applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes. (a) Any and all payments by the Borrowers to the Bank under
this Agreement and any other Loan Document shall be made free and clear of, and
without deduction or withholding for any Taxes. In addition, the Borrowers shall
pay all Other Taxes.
(b) The Borrowers agree to indemnify and hold harmless the
Bank for the full amount of Taxes or Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this Section) paid by
the Bank and any liability arising therefrom or with respect thereto. Payment
under this indemnification shall be made within 30 days after the date the Bank
makes written demand therefor.
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(c) If the Borrowers shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to the Bank, then:
(i) the sum payable shall be increased as necessary
so that after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums
payable under this Section) the Bank receives an amount equal to the
sum it would have received had no such deductions or withholdings been
made;
(ii) the Borrowers shall make such deductions and
withholdings;
(iii) the Borrowers shall pay the full amount
deducted or withheld to the relevant taxing authority or other
authority in accordance with applicable law; and
(iv) the Borrowers shall also pay to the Bank, at the
time interest is paid, all additional amounts which the Bank specifies
as necessary to preserve the after-tax yield the Bank would have
received if such Taxes or Other Taxes had not been imposed.
(d) Within 30 days after the date of any payment by the
Borrowers of Taxes or Other Taxes, the Borrowers shall furnish to the Bank the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Bank.
(e) If the Borrowers are required to pay additional amounts to
the Bank pursuant to subsection (c) of this Section, then the Bank shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change
the jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Borrowers which may thereafter accrue, if such change in the
judgment of the Bank is not otherwise disadvantageous to the Bank.
3.2 Illegality. (a) If the Bank determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for the Bank or its Lending Office to make Offshore Rate
Loans, then, on notice thereof by the Bank to the Company, any obligation of the
Bank to make, convert Federal Funds Rate Loans into or maintain Offshore Rate
Loans shall be suspended until the Bank notifies the Company that the
circumstances giving rise to such determination no longer exist.
(b) If the Bank determines that it is unlawful to maintain any
Offshore Rate Loan, the Borrowers shall, upon its receipt by the Company of
notice of such fact and demand from such Bank, convert to Federal Funds Rate
Loans the amount in full
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of such Offshore Rate Loans of the Bank then outstanding, together with interest
accrued thereon and amounts required under Section 3.4, either on the last day
of the Interest Period thereof, if the Bank may lawfully continue to maintain
such Offshore Rate Loans to such day, or immediately, if the Bank may not
lawfully continue to maintain such Offshore Rate Loan. If the Borrowers are
required to so prepay any Offshore Rate Loan, then concurrently with such
prepayment, the Borrowers shall borrow from the Bank, in the amount of such
repayment, a Federal Funds Rate Loan.
(c) Before giving any notice to the Company under this
Section, the Bank shall designate a different Lending Office with respect to its
Offshore Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise disadvantageous to the Bank.
3.3 Increased Costs and Reduction of Return. (a) If the Bank determines
that, due to either (i) the introduction of or any change (other than any change
by way of imposition of or increase in reserve requirements included in the
calculation of the Offshore Rate) in or in the interpretation of any law or
regulation or (ii) the compliance by the Bank with any guideline or request,
issued or becoming effective after the date hereof, from any central bank or
other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to the Bank of agreeing to make or making,
funding or maintaining any Offshore Rate Loans then the Borrowers shall be
liable for, and shall from time to time, upon demand, pay to the Bank,
additional amounts as are sufficient to compensate the Bank for such increased
costs.
(b) If the Bank shall have determined that, after the date
hereof, (i) the introduction of any Capital Adequacy Regulation, (ii) any change
in any Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or (iv) compliance by the Bank (or its Lending Office) or any
corporation controlling the Bank with any Capital Adequacy Regulation, affects
or would affect the amount of capital required or expected to be maintained by
the Bank or any corporation controlling the Bank and (taking into consideration
the Bank's or such corporation's policies with respect to capital adequacy and
the Bank's desired return on capital) determines that the amount of such capital
is increased as a consequence of the commitments, loans, credits or obligations
under this Agreement, then, upon demand of the Bank to the Borrowers, the
Borrowers shall pay to the Bank, from time to time as specified by the Bank,
additional amounts sufficient to compensate the Bank for such increase.
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3.4 Funding Losses. The Borrowers shall reimburse the Bank
and hold the Bank harmless from any loss or expense which the
Bank may sustain or incur as a consequence of:
(a) the failure of the Borrowers to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(b) the failure of the Borrowers to borrow, continue or
convert a Loan after the Borrowers have given (or are deemed to have given) a
Notice of Borrowing or a Notice of Conversion/Continuation;
(c) the failure of the Borrowers to make any prepayment in
accordance with any notice delivered under Section 2.6;
(d) the prepayment or other payment (including after
acceleration thereof) of an Offshore Rate Loan on a day that is not the last day
of the relevant Interest Period;
(e) the automatic conversion under Section 2.4 of any Offshore
Rate Loan to a Federal Funds Rate Loan on a day that is not the last day of the
relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by the Borrowers to the Bank under this Section and
under subsection 3.3(a), each Offshore Rate Loan made by the Bank (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the LIBOR used in determining the Offshore Rate
for such Offshore Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such Offshore Rate Loan is in fact so funded.
3.5 Inability to Determine Rates. If the Bank determines that for any
reason adequate and reasonable means do not exist for determining the Offshore
Rate for any requested Interest Period with respect to a proposed Offshore Rate
Loan, or that the Offshore Rate applicable pursuant to Section 2.7(a) for any
requested Interest Period with respect to a proposed Offshore Rate Loan does not
adequately and fairly reflect the cost to the Bank of funding such Loan, the
Bank will promptly so notify the Company. Thereafter, the obligation of the Bank
to make or maintain Offshore Rate Loans hereunder shall be suspended until the
Bank revokes such notice in writing. Upon receipt of such notice, the Company
may revoke any Notice of Borrowing or Notice of Conversion/Continuation then
submitted by it. If the Company does not revoke such Notice, the Bank shall make
or continue the Loans, as proposed by the Company, in the amount specified in
the applicable notice submitted by the Company, but such Loans shall
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be made, converted or continued as Federal Funds Rate Loans instead of Offshore
Rate Loans.
3.6 Certificates of Bank. The Bank, when claiming reimbursement or
compensation under this Article III, shall deliver to the Company a certificate
setting forth in reasonable detail the amount payable to the Bank hereunder and
such certificate shall be conclusive and binding on the Borrowers in the absence
of manifest error. The Bank agrees to deliver such certificate within 180 days
after becoming aware of any claim for reimbursement or compensation under this
Article III.
3.7 Survival. The agreements and obligations of the Company in this
Article III shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions of Effectiveness. The effectiveness of this Agreement
and the obligation of the Bank to make Loans hereunder is subject to the
condition that the Bank has received on the Closing Date all of the following,
in form and substance satisfactory to the Bank:
(a) Amended and Restated Credit Agreement. This Agreement
executed by each party thereto;
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of
directors of each Borrower authorizing the transactions contemplated
hereby, certified as of the Closing Date by the Secretary or an
Assistant Secretary of the such Borrower; and
(ii) A certificate of the Secretary or Assistant
Secretary of each Borrower certifying the names and true signatures of
the officers of such Borrower authorized to execute, deliver and
perform, as applicable, this Agreement, and all other Loan Documents to
be delivered by it hereunder;
(c) Organization Documents; Good Standing. Each of the
following documents:
(i) the articles or certificate of incorporation and
the bylaws of each Borrower as in effect on the Closing Date, certified
by the Secretary or Assistant Secretary of each Borrower as of the
Closing Date; and
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(ii) a good standing certificate for each Borrower
from the Secretary of State (or similar, applicable Governmental
Authority) of its state of incorporation and each state where such
Borrower is qualified to do business as a foreign corporation as of a
recent date;
(d) Legal Opinion. An opinion of counsel to the each Borrower
and addressed to the Bank, substantially in the form of Exhibit D;
(e) Payment of Fees. Evidence of payment by the Company of all
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Closing Date, together with Attorney Costs of the Bank to the extent
invoiced prior to or on the Closing Date, plus such additional amounts of
Attorney Costs as shall constitute the Bank's reasonable estimate of Attorney
Costs incurred or to be incurred by it through the closing proceedings (provided
that such estimate shall not thereafter preclude final settling of accounts
between the Borrowers and the Bank); including any such costs, fees and expenses
arising under or referenced in Section 9.4;
(f) Certificate. A certificate signed by a Responsible Officer
in such capacity, dated as of the Closing Date, stating that:
(i) the representations and warranties contained
in Article V are true and correct on and as of such date, as
though made on and as of such date;
(ii) no Default or Event of Default exists or
would result from the initial Borrowing;
(iii) there has occurred since December 31, 1996 no
event or circumstance that has resulted or could reasonably be
expected to result in a Material Adverse Effect;
(g) Warrant Documents. The Company shall have
delivered to the Bank either the Warrant Documents duly executed
and registered in the name of the Bank or such Affiliates of the
Bank as the Bank shall designate;
(h) Resolutions - Xxxxxxxxx.
(i) Copies of the resolutions of the board of
directors of Xxxxxxxxx authorizing execution and delivery of the
Guaranty, certified as of the Closing Date by the Secretary or an
Assistant Secretary of such Borrower;
(ii) A certificate of the Secretary or Assistant
Secretary of Xxxxxxxxx certifying the names and true signatures of the
officers of Xxxxxxxxx authorized to execute, deliver and perform the
Guaranty;
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(i) Organization Documents; Good Standing. Each of
the following documents:
(i) the articles or certificate of
incorporation and the bylaws of Xxxxxxxxx as in effect on the
Closing Date, certified by the Secretary or Assistant
Secretary of Xxxxxxxxx as of the Closing Date; and
(ii) a good standing certificate for Xxxxxxxxx from
the Secretary of State (or similar, applicable Governmental
Authority) of its state of incorporation and each state where
Xxxxxxxxx is qualified to do business as a foreign corporation
as of a recent date.
(j) Guaranty. The Guaranty executed by Xxxxxxxxx;
(k) Pledge Agreement. The Pledge Agreement executed by the
Company together with stock certificates, stock powers executed in blank and
such other documents as the Bank may deem necessary with respect thereto;
(l) LLC Pledge Agreement. The LLC Pledge Agreement executed by
Merger Co. together with such other documents as the Bank may deem necessary
with respect thereto;
(m) Resolutions; Incumbency Merger Co..
(i) Copies of the resolutions of the board of
directors of Merger Co. authorizing the transactions
contemplated hereby, certified as of the Closing Date by the
Secretary or an Assistant Secretary of Merger Co.; and
(ii) A certificate of the Secretary or Assistant
Secretary of Merger Co. certifying the names and true
signatures of the officers of Merger Co. authorized to
execute, deliver and perform, as applicable, this Agreement,
and all other Loan Documents to be delivered by it hereunder;
(n) Organization Documents; Good Standing. Each of the
following documents:
(i) the articles or certificate of incorporation and
the bylaws of Merger Co. as in effect on the Closing Date,
certified by the Secretary or Assistant Secretary of Merger
Co. as of the Closing Date; and
(ii) the good standing certificate for Merger Co.
from the Secretary of State (or similar, applicable
Governmental Authority) of its state of incorporation and each
state where Merger Co. is qualified to do business as a
foreign corporation as of a recent date;
(o) Capital Contribution. The Company shall have delivered a
certificate confirming that Xxxxxxxxx has contributed
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an additional $10,000,000 since December 1, 1997 to the equity of the Company
and such equity shall be in form satisfactory to the Bank; and
(p) Other Documents. Such other approvals, opinions, documents
or materials as the Bank may reasonably request.
4.2 Conditions to All Borrowings. The obligation of the Bank to make
any Loan to be made by it (including its initial Loan) under Section 2.1 is
subject to the satisfaction of the following conditions precedent on the
relevant Borrowing Date:
(a) Notice of Borrowing. The Bank shall have received a Notice
of Borrowing;
(b) Continuation of Representations and Warranties. The
representations and warranties in Article V hereof and in each Loan Document
shall be true and correct on and as of such Borrowing Date with the same effect
as if made on and as of such Borrowing Date (except to the extent such
representations and warranties expressly refer to an earlier date, in which case
they shall be true and correct as of such earlier date);
(c) No Existing Default. No Default or Event of Default shall
exist or shall result from such Borrowing; and
(d) Initial Loan. Concurrently with the initial Loan
hereunder, the Company shall have purchased Bricoleur Capital Management, Inc.
pursuant to a merger agreement dated February 20, 1998, have contributed the
business of Bricoleur Capital Management, Inc. to Bricoleur Capital Management
LLC and have caused the Bank to have a first perfected security interest in the
direct and indirect interest of the Company in Bricoleur Capital Management LLC
pursuant to the Pledge Agreement.
(e) Consent of Bank. Concurrently with the subsequent Loans
hereunder, the Company shall have obtained the written consent of the Bank to
the Company's or Holding's acquisition of each PERSI for which the Loan proceeds
are to be used and the Borrowers shall have caused the Bank to have a first
perfected security interest in such PERSI in accordance with such documents as
shall be satisfactory to the Bank in its sole discretion.
Each Notice of Borrowing submitted by the Company hereunder shall constitute a
representation and warranty by the Company hereunder, as of the date of each
such notice and as of each Borrowing Date that the conditions in Sections
4.2(a), (b) and (c) are satisfied.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrowers represent and warrant to the Bank that:
5.1 Corporate Existence and Power. (a) Each of the Company
and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation;
(b) Each of the Company and its Subsidiaries has the power and
authority and all governmental licenses, authorizations, consents and approvals
necessary to own its assets, carry on its business and the Company has the power
and authority and all governmental licenses, authorizations, consents and
approvals to execute, deliver, and perform its obligations under the Loan
Documents;
(c) Each of the Company and its Subsidiaries is duly qualified
as a foreign corporation and is licensed and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification or license, except to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect; and
(d) Each of the Company and its Subsidiaries is in compliance
with all Requirements of Law, except to the extent that the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
5.2 Corporate Authorization; No Contravention. The execution, delivery
and performance by the Borrowers of this Agreement and each other Loan Document
to which either Borrower is party, have been duly authorized by all necessary
corporate action, and do not and will not:
(a) contravene the terms of any of the Organization Documents
of either Borrower;
(b) conflict with or result in any breach or contravention of,
or the creation of any Lien under, any document evidencing any Contractual
Obligation to which either Borrower is a party, except for the creation of Liens
pursuant to the Loan Documents, or any order, injunction, writ or decree of any
Governmental Authority to which either Borrower or its property is subject; or
(c) violate any Requirement of Law.
5.3 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required
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in connection with the execution, delivery or performance by, or enforcement
against, either Borrower of this Agreement or any other Loan Document.
5.4 Binding Effect. This Agreement and each other Loan Document to
which either Borrower is a party constitute the legal, valid and binding
obligations of such Borrower, enforceable against such Borrower in accordance
with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability.
5.5 Litigation. There are no actions, suits, proceedings, labor
controversies, claims or disputes pending, or to the best knowledge of the
Borrowers, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, against the Company, or its Subsidiaries or
any of their respective properties which:
(a) purport to affect or pertain to this Agreement or any
other Loan Document, or any of the transactions contemplated hereby or thereby;
or
(b) if determined adversely to the Company or its
Subsidiaries, would reasonably be expected to have a Material Adverse Effect. No
injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Loan Document, or directing that the transactions provided for herein or therein
not be consummated as herein or therein provided.
5.6 No Default. No Default or Event of Default exists or would result
from the incurring of any Obligations by the Borrowers. As of the Closing Date,
neither the Company nor any Subsidiary is in default under or with respect to
any Contractual Obligation in any respect which, individually or together with
all such defaults, could reasonably be expected to have a Material Adverse
Effect, or that would, if such default had occurred after the Closing Date,
create an Event of Default under subsection 8.1(e).
5.7 Employee Benefit Plans. Set forth on Schedule 5.7 is a list of all
welfare plans and all pension plans, within the meaning of sections 3(1) and (2)
of ERISA, respectively, which, to the knowledge of the Borrowers, are maintained
with respect to employees of the Company or its Subsidiaries. Also set forth in
Schedule 5.7 is a list of all Multiemployer Plans, all Welfare Plans and all
Plans which the Borrowers have adopted or expect to adopt.
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5.8 Use of Proceeds; Margin Regulations. The proceeds of the Loans are
to be used solely for the purposes set forth in and permitted by Section 6.12
and Section 7.4. The Company is not generally engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock.
5.9 Title to Properties. The Company and each Subsidiary have good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. As of the Closing Date, the
property of the Company and its Subsidiaries is subject to no Liens, other than
Permitted Liens.
5.10 Taxes. The Company and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Company or
any Subsidiary that would, if made, have a Material Adverse Effect.
5.11 Financial Condition. (a) The unaudited consolidated financial
statements of the Company and its Subsidiaries dated December 31, 1996,
including the notes accompanying the same, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for the
fiscal quarter ended on that date:
(i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, subject to ordinary, good faith
year-end audit adjustments;
(ii) fairly present the financial condition of the
Company and its Subsidiaries as of the date thereof and results of
operations for the period covered thereby; and
(iii) except as specifically disclosed in Schedule
5.11, show all material indebtedness and other liabilities, direct or
contingent, of the Company and its consolidated Subsidiaries as of the
date thereof, including liabilities for taxes, material commitments and
Contingent Obligations.
(b) Since December 31, 1996, there has been no Material
Adverse Effect.
5.12 Environmental Matters. The effect of existing Environmental Laws
and existing Environmental Claims on the Company's or Holding's business,
operations and properties could
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not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
5.13 Regulated Entities. None of the Company, any Person controlling
the Company, or any Subsidiary, is an "Investment Company" within the meaning of
the Investment Company Act of 1940. The Company is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.
5.14 No Burdensome Restrictions. Neither the Company nor any Subsidiary
is a party to or bound by any Contractual Obligation, or subject to any
restriction in any Organization Document, or any Requirement of Law, which could
reasonably be expected to have a Material Adverse Effect.
5.15 Copyrights, Patents, Trademarks and Licenses, Etc. The Company or
its Subsidiaries own or are licensed or otherwise have the right to use all of
the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. To the best knowledge of the Company, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Company or any
Subsidiary infringes upon any rights held by any other Person. No claim or
litigation regarding any of the foregoing is pending or threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the Company,
proposed, which, in either case, could reasonably be expected to have a Material
Adverse Effect.
5.16 Subsidiaries. The Company has no Subsidiaries other than those
specifically disclosed in part (a) of Schedule 5.16 hereto and has no equity
investments in any other corporation or entity other than those specifically
disclosed in part (b) of Schedule 5.16 and as otherwise permitted hereunder.
5.17 Insurance. The properties and business of the Company and its
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Company, in such amounts, with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where the Company
or such Subsidiary operates.
5.18 Full Disclosure. None of the representations or warranties made by
either Borrower in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in any
exhibit, report, statement or certificate furnished by or on behalf of
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either Borrower in connection with the Loan Documents (including the offering
and disclosure materials delivered by or on behalf of either Borrower with
respect to the Borrowers, Merger Co., Bricoleur Capital Management, Inc. and
Bricoleur Capital Management LLC to the Bank prior to the Closing Date),
contains any untrue statement of a material fact or omits any material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they are made, not misleading as of
the time when made or delivered; provided that all representations or warranties
made with respect to Merger Co., Bricoleur Capital Management, Inc. and
Bricoleur Capital Management LLC by the Borrowers herein are made to the best of
the Borrowers' knowledge.
5.19 Material Agreements. The Company and its Subsidiaries are not
parties to any agreement with respect to borrowed money or any other agreement,
the violation of which or the termination of which would reasonably be likely to
have a Material Adverse Effect.
5.20 Capitalization. The authorized capital stock of the Company
consists of 102,000,000 shares of capital stock, of which 100,000,000 shares are
common stock, $.01 par value and 2,000,000 shares are preferred stock, $.01 par
value. As of the date hereof, 7,365,000 shares of such common stock (including
the Company Stock) and 200,000 shares of such preferred stock were validly
issued and outstanding, fully paid and non assessable. No Person has any
preemptive right to purchase or subscribe for any shares of stock of the Company
except as set forth in the Shareholders Agreement among Xxxxx X. Xxxxxxx, Xxxxxx
Xxxxx, AJG Financial Services, inc., Xxxxxx X. Xxxxxxxxx & Co. and Asset
Alliance Corporation dated as of July 8, 1996, a true and correct copy of which
Shareholders Agreement has been delivered to the Bank. Except as set forth in
Schedule 5.20, there are no outstanding securities of the Company or any of its
Subsidiaries which are convertible into or exchangeable for any shares of its
capital stock, there are no existing contracts, options, warrants, calls or
similar commitments of any character granted or issued by the Company or any of
its Subsidiaries calling for or relating to the issuance or transfer of shares
of capital stock or any other securities of the Company or any of its
Subsidiaries and there are no stock appreciation rights, contingent interest
certificates or coupons, phantom stock rights or similar interests in the
capital stock or any other securities of the Company or any of its Subsidiaries.
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ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Loan or other Obligation shall remain unpaid or
unsatisfied:
6.1 Financial Statements. The Company shall deliver to the
Bank, in form and detail satisfactory to the Bank:
(a) as soon as available, but not later than 90 days after the
end of each fiscal year, a copy of the audited consolidated balance sheet of the
Company and its Subsidiaries as at the end of such year and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the opinion of Ernst & Young
LLP or another nationally-recognized independent public accounting firm
("Independent Auditor"),which report shall state that such consolidated
financial statements present fairly the financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years. Such opinion shall not be qualified or limited because of a restricted or
limited examination by the Independent Auditor of any material portion of the
Company's or any Subsidiary's records;
(b) as soon as available, but not later than 45 days after the
end of each of the first three fiscal quarters of each fiscal year, a copy of
the unaudited consolidated balance sheet of the Company and its Subsidiaries as
of the end of such quarter and the related consolidated statements of income or
operations, shareholders' equity and cash flows for the period commencing on the
first day and ending on the last day of such quarter, and certified by a
Responsible Officer as fairly presenting, in accordance with GAAP (subject to
ordinary, good faith year-end audit adjustments), the financial position and the
results of operations of the Company and the Subsidiaries;
(c) as soon as available, but not later than 45 days after the
end of each fiscal year, a copy of an unaudited consolidating balance sheet of
the Company and its Subsidiaries as at the end of such year and the related
consolidating statement of income, shareholders' equity and cash flows for such
year, certified by a Responsible Officer as having been developed and used in
connection with the preparation of the financial statements referred to in
subsection 6.1(a); and
(d) as soon as available, but not later than 30 days after
each month of each fiscal year, a copy of the unaudited consolidated balance
sheet of the Company and its Subsidiaries as of the end of such month and the
related consolidated statements of income, shareholders' equity and cash flows
for the period commencing on the first day and ending on the last day of such
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month, and certified by a Responsible Officer as fairly presenting, in
accordance with GAAP (subject to ordinary, good faith year-end audit
adjustments), the financial position and the results of operations of the
Company and the Subsidiaries.
6.2 Certificates; Other Information. The Company shall
furnish to the Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.1(a), a certificate of the Independent Auditor
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and (b), a Compliance Certificate in
substantially the form of Exhibit C executed by a Responsible Officer;
(c) promptly, copies of all financial statements and reports
that the Company sends to its shareholders, and copies of all financial
statements and regular, periodical or special reports (including Forms 10K, 10Q
and 8K) that the Company or any Subsidiary may make to, or file with, the SEC;
and
(d) promptly, such additional information regarding the
business, financial or corporate affairs of the Company or any Subsidiary as the
Bank may from time to time reasonably request in writing.
6.3 Notices. The Company shall promptly notify the Bank:
(a) of the occurrence of any Default or Event of Default, and
of the occurrence or existence of any event or circumstance that foreseeably
will become a Default or Event of Default;
(b) of the occurrence of any default or event of default as
those terms are defined under the terms applicable to any Indebtedness of the
Company or any other Subsidiary;
(c) of any matter that has resulted or may result in a
Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of the Company or any Subsidiary; (ii)
any dispute, litigation, investigation, proceeding or suspension between the
Company or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Company or any Subsidiary; including pursuant to any applicable
Environmental Laws;
(d) of the failure of any Person in the Controlled Group to
make a required contribution to any Plan if such failure is sufficient to give
rise to a Lien under section 302(f)(1) of ERISA;
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(e) of the institution of any steps by any entity in the
Controlled Group to withdraw from, or the institution of any steps by the
Company or any other Person to terminate under a distress termination, any Plan
or the taking of any action with respect to a Plan which could result in the
requirement that the Company or any of its Subsidiaries furnish a bond or other
security to such Plan, or the occurrence of any event with respect to any Plan
which could result in the incurrence by the Company or any of its Subsidiaries
of any material liability (other than a liability for contributions or
premiums), fine or penalty; or
(f) of any material change in accounting policies or financial
reporting practices by the Company or any of its consolidated Subsidiaries.
Each notice under this Section shall be accompanied by a
written statement by a Responsible Officer setting forth details of the
occurrence referred to therein, and stating what action the Company or any
affected Subsidiary proposes to take with respect thereto and at what time. Each
notice under subsection 6.3(a) shall describe with particularity any and all
clauses or provisions of this Agreement or other Loan Document that have been
breached or violated.
6.4 Preservation of Corporate Existence, Etc. The Company shall, and
shall cause each Subsidiary to:
(a) preserve and maintain in full force and effect its
existence and good standing under the laws of its state or jurisdiction of
organization;
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business;
(c) use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.
6.5 Maintenance of Property. The Company shall maintain, and shall
cause each Subsidiary to maintain, and preserve all its property which is used
or useful in its business in good working order and condition, ordinary wear and
tear excepted and make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
6.6 Insurance. The Company shall maintain, and shall cause each
Subsidiary to maintain, with financially sound and reputable
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independent insurers, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by companies
engaged in similar businesses and owning similar properties in localities where
the Company or such Subsidiary operates.
6.7 Payment of Obligations. The Company shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and payable, all
their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges
or levies upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the Company or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a
Lien upon its property; and
(c) all Indebtedness, as and when due and payable, but subject
to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness.
6.8 Compliance with Laws. The Company shall comply, and shall cause
each Subsidiary to comply, in all material respects with all Requirements of Law
of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
6.9 Compliance with ERISA. The Company shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
6.10 Inspection of Property and Books and Records. The Company shall
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied, shall be made of all financial transactions and matters
involving the assets and business of the Company and such Subsidiary. The
Company shall permit, and shall cause each Subsidiary to permit, representatives
and independent contractors of the Bank to visit and inspect any of their
respective properties, to examine their respective corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Company; provided, however, when an Event
of Default exists the
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Bank may do any of the foregoing at the expense of the Borrowers at any time
during normal business hours and without advance notice.
6.11 Environmental Laws. The Borrowers shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws.
6.12 Initial Use of Proceeds. The Borrowers shall use the proceeds of
the initial Loans to acquire Bricoleur Capital Management, Inc. and the
subsequent Loans to acquire PERSI's in certain investment advisory firms.
6.13 Pledge of PERSI's. The Borrowers shall promptly pledge the PERSI's
which are acquired with the Loan proceeds in form satisfactory to the Bank.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Loan or other Obligation shall remain unpaid or
unsatisfied, unless the Bank waives compliance in writing:
7.1 Limitation on Liens. The Company shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, make, create, incur, assume or
suffer to exist any Lien upon or with respect to any part of its property,
whether now owned or hereafter acquired, other than the following ("Permitted
Liens"):
(a) any Lien deemed to have been created under any Loan
Document;
(b) Liens for taxes, fees, assessments or other governmental
charges which are not delinquent or remain payable without penalty, or to the
extent that non-payment thereof is permitted by Section 6.7, provided that no
notice of lien has been filed or recorded under the Code;
(c) Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation;
(d) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;
and
(e) any Lien existing on property of the Company or any
Subsidiary on the Closing Date and set forth on Schedule 7.16.
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7.2 Consolidations and Mergers. The Company shall not, and shall not
suffer or permit any Subsidiary to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, or make any
Acquisition of any Person, except that, upon the Bank's written approval, the
Borrowers may purchase PERSIs and consummate the Acquisition of Bricoleur
Capital Management, Inc.
7.3 Transactions with Affiliates. The Company shall not, and shall not
suffer or permit any Subsidiary to, enter into any transaction with any
Affiliate of the Company, except upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would be obtained in a
comparable arm's-length transaction with a Person not an Affiliate of the
Company or such Subsidiary.
7.4 Use of Proceeds. The Company shall not, and shall not suffer or
permit any Subsidiary to, use any portion of Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Company or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act if the acquisition of such
security is subject to Regulation 14D of the Exchange Act and the subject
company does not recommend acceptance of the tender offer of the bidder pursuant
to Rule 14e-2 of the Exchange Act.
7.5 ERISA. The Company shall not, and shall not suffer or permit any of
its ERISA Affiliates to: (a) engage in a prohibited transaction or violation of
the fiduciary responsibility rules with respect to any Plan which has resulted
or could reasonably expected to result in liability of the Company in an
aggregate amount in excess of $1,000,000; or (b) engage in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
7.6 Change in Business. The Company shall not, and shall not suffer or
permit any Subsidiary to, engage in any line of business other than the
acquisition of interests in, management of, marketing of, developing of and
development of products for, investment advisory firms and firms engaged in
securities lending.
7.7 Accounting Changes. The Company shall not, and shall not suffer or
permit any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as permitted by GAAP.
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7.8 Financial Covenants. The Company shall not permit:
(a) at any time the Consolidated Net Worth of the Company to
be less than the sum of (i) $15,000,000 plus (ii) 80% of the net proceeds of any
equity issued by the Company or any of its Subsidiaries (on a consolidated
basis) after the Closing Date;
(b) as at the end of any fiscal quarter, the ratio for the
Calculation Period then ending of EBITDA to Debt Service to be less than 1.0 to
1.0;
(c) as at the end of any fiscal quarter, the ratio for the
Calculation Period then ending of EBITDA to its consolidated interest expense to
be less than 2.0 to 1.0;
(d) at the end of any fiscal quarter, the ratio for the
Calculation Period then ending of Performance Fees to interest expense payable
on any outstanding Facility A Loans to be less than 4.0 to 1.0; and
(e) as at the end of any fiscal quarter the sum of the
Subsidiary Stock Values of all of the Subsidiaries whose stock is pledged to the
Bank pursuant to the Pledge Agreement to be less than 150% of the principal
amount of all outstanding Loans.
7.9 Indebtedness. The Company shall not, and shall not permit any
Subsidiary to, create, incur, assume or suffer to exist or otherwise become or
be liable in respect of any Indebtedness, other than (i) Indebtedness in respect
of the Loans and the other Obligations; (ii) Indebtedness subordinated as to
payments of principal and interest in form satisfactory to the Bank; and (iii)
Indebtedness in repect of capital leases or the acquisition of equipment,
provided that the aggregate amount of all such Indebtedness in respect of
capital leases or the acquisition of equipment shall not exceed $10,000.
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Event of Default. Any of the following shall constitute an "Event
of Default":
(a) Non-Payment. The Borrowers fail to pay, (i) when and as
required to be paid herein, any amount of principal of any Loan, or (ii) within
five days after the same becomes due, any interest, fee or any other amount
payable hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty
by the Company or any Subsidiary made or deemed made herein, in any other Loan
Document, or which is contained in any certificate, document or financial or
other statement by the Company, any Subsidiary, or any Responsible Officer,
furnished at
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any time under this Agreement, or in or under any other Loan Document, is
incorrect in any material respect on or as of the date made or deemed made; or
(c) Non-Compliance with Certain Conditions. Failure by the
Borrowers to comply with their covenants set forth in Sections 6.1, 6.2, or 6.3
or in Article VII; or
(d) Other Defaults. The Borrowers fail to perform or observe
any other term or covenant contained in this Agreement or any other Loan
Document, and such default shall continue unremedied for a period of 20 days
after the date upon which written notice thereof is given to the Company by the
Bank; or
(e) Cross-Default. The Company or any Subsidiary (i) fails to
make any payment in respect of any Indebtedness or Contingent Obligation having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than $100,000 when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) and such
failure continues after the applicable grace or notice period, if any, specified
in the relevant document on the date of such failure; or (ii) fails to perform
or observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation of more than $100,000 and such failure
continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure if the effect of such failure,
event or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause such Indebtedness to be declared to be due and payable prior to its stated
maturity, or such Contingent Obligation to become payable or cash collateral in
respect thereof to be demanded; or
(f) Insolvency; Voluntary Proceedings. Either Borrower (i)
ceases or fails to be solvent, or generally fails to pay, or admits in writing
its inability to pay, its debts as they become due, subject to applicable grace
periods, if any, whether at stated maturity or otherwise; (ii) voluntarily
ceases to conduct its business in the ordinary course; (iii) commences any
Insolvency Proceeding with respect to itself; or (iv) takes any action to
effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against either Borrower or any writ, judgment,
warrant of attachment, execution or similar process, is issued or levied against
a substantial part of the either Borrower's properties, and any such proceeding
or petition shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released, vacated or fully
bonded within 60 days
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after commencement, filing or levy; (ii) either Borrower admits the material
allegations of a petition against it in any Insolvency Proceeding, or an order
for relief (or similar order under non-U.S. law) is ordered in any Insolvency
Proceeding; or (iii) either Borrower acquiesces in the appointment of a
receiver, trustee, custodian, conservator, liquidator, mortgagee in possession
(or agent therefor), or other similar Person for itself or a substantial portion
of its property or business; or
(h) Employee Benefit Plans. A contribution failure occurs with
respect to any Plan sufficient to give rise to a Lien against the Company or any
of its Subsidiaries under section 302(f)(1) of ERISA (as in effect on the
Closing Date); or withdrawal by one or more companies in the Controlled Group
from one or more Multiemployer Plans to which it or they have an obligation to
contribute and the withdrawal liability (without unaccrued interest) to
multiemployer plans as a result of such withdrawal or withdrawals (including any
outstanding withdrawal liability that the Controlled Group has incurred on the
date of such withdrawal) is $10,000,000 or more;
(i) Monetary Judgments. One or more non-interlocutory
judgments, non-interlocutory orders, decrees or arbitration awards is entered
against the Company or any Subsidiary involving in the aggregate a liability (to
the extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related series of
transactions, incidents or conditions, of $1,000,000 or more, and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period of 30
days after the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order
or decree is entered against the Company or any Subsidiary which does or would
reasonably be expected to have a Material Adverse Effect, and there shall be any
period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(k) Change of Control. There occurs any Change of Control; or
(l) Loss of Licenses. Any Governmental Authority revokes or
fails to renew any material license, permit or franchise of the Company or any
Subsidiary, or the Company or any Subsidiary for any reason loses any material
license, permit or franchise, or the Company or any Subsidiary suffers the
imposition of any restraining order, escrow, suspension or impound of funds in
connection with any proceeding (judicial or administrative) with respect to any
material license, permit or franchise, except to the extent that any of the
foregoing could not reasonably be expected to have a Material Adverse Effect on
the Company and its Subsidiaries taken as a whole; or
(m) Collateral.
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(i) any provision of any Collateral Document shall
for any reason cease to be valid and binding on or enforceable against the
Company or any Subsidiary party thereto or the Company or any Subsidiary shall
so state in writing or bring an action to limit its obligations or liabilities
thereunder; or
(ii) any Collateral Document shall for any reason
(other than pursuant to the terms thereof) cease to create a valid security
interest in the Collateral purported to be covered thereby or such security
interest shall for any reason cease to be a perfected and first priority
security interest subject only to Permitted Liens; or
(n) Default of Gallagher under Gallagher Credit Agreement.
Gallagher fails to comply with covenants set forth in the Gallagher Credit
Agreement, without giving effect to any termination, amendment or modification
thereof.
8.2 Remedies. If any Event of Default occurs, the Bank
shall have the right to:
(a) declare the Facility A Loan Commitment and the Facility B
Loan Commitment to be terminated, whereupon the Facility A Loan Commitment and
the Facility B Loan Commitment shall be terminated;
(b) declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document to be immediately due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by the Company; and
(c) exercise all rights and remedies available to the Bank
under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
(f) or (g) of Section 8.1 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the obligation of the Bank
to make Loans shall automatically terminate and the unpaid principal amount of
all outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of the Bank.
8.3 Rights Not Exclusive. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
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ARTICLE IX
MISCELLANEOUS
9.1 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrowers therefrom, shall be effective unless the same shall
be in writing and signed by the Bank and the Borrowers, and then any such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
9.2 Notices. (a) All notices, requests and other communications shall
be in writing (including, unless the context expressly otherwise provides, by
facsimile transmission, provided that any matter transmitted by the Borrowers by
facsimile (i) shall be immediately confirmed by a telephone call to the
recipient at the number specified below, and (ii) shall be followed promptly by
delivery of a hard copy original thereof) and mailed, faxed or delivered, to the
address or facsimile number specified below; or to such other address as shall
be designated by the Company or the Bank in a written notice to the other party.
If to the Borrower:
Asset Alliance Corporation and
Asset Alliance Holding Corp.
The Xxxxxxxxx Xxxxxx
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Bank:
Bank of America National Trust
and Savings Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery;
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except that notices pursuant to Article II shall not be effective until actually
received by the Bank.
(c) Any agreement of the Bank herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Borrowers. The Bank shall be entitled to rely on the authority of
any Person purporting to be a Person authorized by the Borrowers to give such
notice and the Bank shall not have any liability to the Borrowers or any other
Person on account of any action taken or not taken by the Bank in reliance upon
such telephonic or facsimile notice. Notices transmitted by telephone shall be
followed by written notice provided that the obligation of the Borrowers to
repay the Loans shall not be affected in any way or to any extent by any failure
by the Bank to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Bank of a confirmation which is at variance with
the terms understood by the Bank to be contained in the telephonic or facsimile
notice.
9.3 No Waiver; Cumulative Remedies. No failure by the Bank to exercise
and no delay by the Bank in exercising any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.
9.4 Costs and Expenses. The Borrowers shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse the Bank within five Business Days after demand
(subject to subsection 4.1(e)) for all reasonable costs and expenses incurred by
the Bank in connection with the development, preparation, delivery,
administration and execution of, and any amendment, supplement, waiver or
modification to (in each case, whether or not consummated), this Agreement, any
Loan Document and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby and
thereby, including reasonable Attorney Costs incurred by the Bank with respect
thereto; and
(b) pay or reimburse the Bank within five Business Days after
demand (subject to subsection 4.1(e)) for all reasonable costs and expenses
(including reasonable Attorney Costs) incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document during the existence of an Event
of Default or after acceleration of the Loans (including in connection with any
"workout" or restructuring regarding the Loans, and including in any Insolvency
Proceeding or appellate proceeding).
9.5 Indemnity. Whether or not the transactions contemplated hereby are
consummated, the Borrowers shall
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indemnify and hold the Bank and its respective officers, directors, employees,
counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses and disbursements
(including reasonable Attorney Costs) of any kind or nature whatsoever which may
at any time (including at any time following repayment of the Loans) be imposed
on, incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or omitted
by any such Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or arising out of this
Agreement or the Loans or the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Borrowers shall have no
obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities resulting from the gross negligence or willful misconduct of such
Indemnified Person. The agreements in this Section shall survive payment of all
other Obligations.
9.6 Payments Set Aside. To the extent that the Borrowers make a payment
to the Bank, or the Bank exercises its right of set-off, and such payment or the
proceeds of such set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Bank in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
Insolvency Proceeding or otherwise, then to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred.
9.7 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrowers may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Bank.
9.8 Assignments, Participations, Etc. (a) The Bank shall have the right
at any time to assign and delegate to an Affiliate of the Bank (an "Assignee")
all of the Loans, the Facility A Commitment, the Facility B Commitment and the
other rights and obligations of the Bank hereunder; provided, however, that the
Borrowers may continue to deal solely and directly with the Bank in connection
with the interest so assigned to an Assignee until written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Company
by the Bank.
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(b) From and after the date that the Bank notifies the Company
of any assignment in accordance with subsection 9.8(a), (i) the Assignee shall
be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such assignment, shall have the rights and
obligations of the Bank under the Loan Documents, and (ii) the Bank shall, to
the extent that rights and obligations hereunder and under the other Loan
Documents have been assigned by it pursuant to such assignment, relinquish its
rights and be released from its obligations under the Loan Documents.
(c) After the receipt by the Company of notice by the Bank of
an assignment pursuant to this Section 9.8 and upon the request of the Bank or
the Assignee, the Company shall execute and deliver to the Assignee a new
Note(s) evidencing such Assignee's assigned Loans and Facility A Commitment and
Facility B Commitment, if applicable, and such other agreements or documents as
the Bank or the Assignee may reasonably request.
(d) The Bank may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Borrowers (a "Participant")
participating interests in any Loans, the Facility A Commitment and the Facility
B Commitment and the other interests of the Bank hereunder and under the other
Loan Documents; provided, however, that (i) the Bank's obligations under this
Agreement shall remain unchanged, (ii) the Bank shall remain solely responsible
for the performance of such obligations, and (iii) the Borrowers shall continue
to deal solely and directly with the Bank in connection with the Bank's rights
and obligations under this Agreement and the other Loan Documents.
(e) Notwithstanding any other provision in this Agreement, the
Bank may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and any Note held by
it in favor of any Federal Reserve Bank in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR Section 203.14, and such Federal Reserve
Bank may enforce such pledge or security interest in any manner permitted under
applicable law.
9.9 Confidentiality. The Bank agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" by the Company (or reasonably understood by the Bank and its Affiliates
to be confidential) and provided to it by the Company or any Subsidiary under
this Agreement or any other Loan Document, and neither it nor any of its
Affiliates shall use any such information other than in connection with or in
enforcement of this Agreement and the other Loan Documents or in connection with
other business now or hereafter existing or contemplated with the Company or any
Subsidiary; except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by the Bank, or
(ii) was or becomes
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available on a non-confidential basis from a source other than the Company,
provided that such source is not bound by a confidentiality agreement with the
Company known to the Bank; provided, however, that the Bank may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Bank is subject or in connection with an
examination of the Bank by any such authority; (B) pursuant to subpoena or other
court process following notice to the Company to the extent permitted by law;
(C) when required to do so in accordance with the provisions of any applicable
Requirement of Law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Bank or its Affiliates may be party; (E)
to the extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (F) to the Bank's independent
auditors and other professional advisors; (G) to any Participant or Assignee,
actual or potential, provided that such Person agrees in writing to keep such
information confidential to the same extent required of the Bank hereunder; (H)
as to the Bank or its Affiliate, as expressly permitted under the terms of any
other document or agreement regarding confidentiality to which the Company or
any Subsidiary is party or is deemed party with the Bank or such Affiliate; and
(I) to its Affiliates provided that any such Affiliate agrees in writing to keep
such information confidential to the same extent required of the Bank hereunder.
9.10 Set-off. In addition to any rights and remedies of the Bank
provided by law, if an Event of Default exists or the Loans have been
accelerated, the Bank is authorized at any time and from time to time, without
prior notice to the Borrowers, any such notice being waived by the Borrowers to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, the Bank to or for the credit or
the account of either Borrower against any and all Obligations owing to the
Bank, now or hereafter existing, irrespective of whether or not the Bank shall
have made demand under this Agreement or any Loan Document and although such
Obligations may be contingent or unmatured. The Bank agrees promptly to notify
the Company after any such set-off and application made by the Bank; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application.
9.11 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
9.12 Severability. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the
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legality or enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
9.13 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Borrowers and the Bank and
their permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
9.14 Joint and Several Liability.
(a) The Obligations of the Borrowers are joint and several.
(b) Each Borrower acknowledges and agrees that it is the
intent of the parties that each Borrower be primarily liable for the
Obligations as a joint and several obligor. It is the intention of the
parties that with respect to liability of either Borrower hereunder
arising solely by reason of its being jointly and severally liable for
Loans taken by the other Borrower the obligations of such Borrower
shall be absolute, unconditional and irrevocable irrespective of:
(i) any lack of validity, legality or enforceability
of this Agreement or any Note as to the other Borrower;
(ii) the failure of the Bank or any holder of any
Note
(A) to enforce any right or remedy against
the other Borrower or any other Person
(including any guarantor) under the
provisions of this Agreement, the Note, or
otherwise, or
(B) to exercise any right or remedy against
any guarantor of, or collateral security,
any Obligations;
(iii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Obligations, or any other extension, compromise or renewal of
any Obligations;
(iv) any reduction, limitation, impairment or
termination of any Obligations with respect to the other
Borrower for any reason including any claim of waiver,
release, surrender, alteration or compromise, and shall not be
subject to (and each Borrower hereby waives any right to or
claim of) any defense or setoff, counterclaim, recoupment or
termination whatsoever by
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reason of the invalidity, illegality, nongenuiness,
irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, any Obligations with respect to
the other Borrower;
(v) any addition, exchange, release, surrender or
nonperfection of any collateral, or any amendment to or waiver
or release or addition of, or consent to departure from, any
guaranty, held by the Bank or any Holder of the Note as
security for any of the Obligations; or
(vi) any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable
discharge of, the other Borrower, any surety or any guarantor.
Each Borrower agrees that its joint and several liability hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Obligations is rescinded or
must be restored by any Bank or any holder of any Note, upon the insolvency,
bankruptcy or reorganization of the Borrower as though such payment had not been
made.
Each Borrower hereby expressly waives: (a) notice of the Bank's
acceptance of this Agreement; (b) notice of the existence or creation or
non-payment of all or any of the Obligations; (c) presentment, demand, notice of
dishonor, protest, and all other notices whatsoever other than notices expressly
provided for in this Agreement and (d) all diligence in collection or protection
of or realization upon the Obligations or any thereof any obligation hereunder,
or any security for or guaranty of any of the foregoing.
No delay on the Bank's part in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise by the Bank
of any right or remedy, shall preclude other or further exercise thereof or the
exercise of any other right or remedy. No action of the Banks permitted
hereunder shall in any way affect or impair the Bank's rights or any Borrower's
obligations under this Agreement.
Notwithstanding the foregoing, Holding shall be liable for the
Obligations for the maximum amount of such liability that can be hereby incurred
without rendering this Agreement, any Note or any other Loan Document, voidable
under applicable law, including applicable law relating to fraudulent conveyance
or fraudulent transfer, and not for any greater amount.
Each Borrower hereby represents and warrants to the Bank that it now
has and will continue to have independent means of obtaining information
concerning the Borrowers' affairs, financial condition and business. The Bank
shall not have any duty or responsibility to provide any Borrower with any
credit or
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other information concerning the Borrowers' affairs, financial condition or
business which may come into the Bank's possession.
9.15 Governing Law and Jurisdiction. (a) THIS AGREEMENT AND THE NOTE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
ILLINOIS; PROVIDED THAT THE BANK SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL
LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF ILLINOIS, XXXX COUNTY, OR OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH BORROWER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THOSE COURTS. EACH BORROWER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH BORROWER WAIVES PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY ILLINOIS LAW.
9.16 Waiver of Jury Trial. EACH BORROWER WAIVES ITS RIGHT TO A TRIAL BY
JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTICIPANT OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
EACH BORROWER AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH BORROWER
FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
9.17 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding between the Borrowers
and the Bank, and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
9.18 Initial Public Offering by the Company. The Bank understands that
before September 30, 1998, the Company expects to receive at least $50,000,000
of net cash proceeds from the initial public offering of common stock of the
Company. Upon the Company's receipt of such $50,000,000 or more of net cash
proceeds and the Bank's reasonable satisfaction with the Company's planned use
of such net cash proceeds, the Bank and the
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Borrowers plan to negotiate the release of the Guaranty and the restructuring of
the facility as a revolving facility; provided, however nothing in this
paragraph shall require the Bank or the Borrowers to negotiate any such changes
or amendments to this Agreement, the Guaranty or any of the Loan Documents.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Chicago, Illinois by their proper and duly
authorized officers as of the day and year first above written.
ASSET ALLIANCE CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Title: Executive Vice President
----------------------------------
ASSET ALLIANCE HOLDING CORP.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Title: Executive Vice President
----------------------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Xxxx Xxxxx
-------------------------------------
Title: Vice President
----------------------------------
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