Exhibit 10.6
[LOGO]
American National Bank Credit Agreement
and Trust Company of Chicago
[LOGO]
BANK ONE Company
This agreement between American National Bank and Trust Company of Chicago, and
its successors and assigns, (the "Bank"), whose address is 000 X. Xxxxx Xxxxxx,
Xxxxx Xxxxxxxx, XX 00000, and Alltech Associates, Inc. (the "Borrower"), whose
address is 0000 Xxxxxxxx Xxxx, Xxxxxxxxx, XX 00000.
1. Credit Facilities.
1.1 Scope. This agreement governs Facility A, and, unless otherwise agreed
to in writing by the Bank and the Borrower or prohibited by applicable
law, governs the Credit Facilities.
1.2 Facility A (Line of Credit). The Bank has approved a credit facility
to the Borrower in the principal sum not to exceed $5,000,000.00 in
the aggregate at any one time outstanding ("Facility A"). Credit under
Facility A shall be repayable as set forth in a Line of Credit Note
executed concurrently with this agreement, and any renewals,
modifications or extensions thereof. The proceeds of Facility A shall
be used for the following purpose: working capital.
1.3 Borrowing Base. The aggregate principal amount of advances outstanding
at any one time under Facility A shall not exceed the lesser of the
Borrowing Base or $5,000,000.00. If at any time the aggregate
principal amount of advances outstanding under Facility A exceeds the
Borrowing Base, the Borrower shall immediately pay to the Bank an
amount equal to the difference between such aggregate principal amount
of advances and the Borrowing Base. "Borrowing Base" means the
aggregate of:
A. 80% of Domestic Eligible Accounts, not to exceed the aggregate of
$5,000,000.00; plus
B. 80% of Foreign Eligible Accounts, not to exceed the aggregate of
$500,000.00; plus
C. 45% of the value of Eligible Inventory, not to exceed the aggregate
of $5,000,000.00. For purposes hereof value shall mean the lesser of
the Borrower's cost thereof calculated on a first-in, first-out basis
or the wholesale market value thereof.
2. Definitions. As used in this agreement, the following terms have the
following respective meanings:
2.1 "Credit Facilities" means all extensions of credit from the Bank to
the Borrower, whether now existing or hereafter arising, including but
not limited to those described in Section 1.
2.2 "Liabilities" means all obligations, indebtedness and liabilities of
the Borrower to any one or more of the Bank, BANK ONE CORPORATION, and
any of their subsidiaries, affiliates or successors, now existing or
later arising, including, without limitation, all loans, advances,
interest, costs, overdraft indebtedness, credit card indebtedness,
lease obligations, or obligations relating to any Rate Management
Transaction, all monetary obligations incurred or accrued during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceedings, regardless of whether allowed or allowable in such
proceeding, and all renewals, extensions, modifications,
consolidations or substitutions of any of the foregoing, whether the
Borrower may be liable jointly with others or individually liable as a
debtor, maker, co-maker, drawer, endorser, guarantor, surety or
otherwise, and whether voluntarily or involuntarily incurred, due or
not due, absolute or contingent, direct or indirect, liquidated or
unliquidated. The term "Rate Management Transaction" in this agreement
means any transaction (including an agreement with respect thereto)
now existing or hereafter entered into among the Borrower, the Bank or
BANK ONE CORPORATION, or any of its subsidiaries or affiliates or
their successors, which is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index
swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, forward transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or
any other similar transaction (including any option with respect to
any of these transactions) or any combination thereof, whether linked
to one or more interest rates, foreign currencies, commodity prices,
equity prices or other financial measures.
2.3 "Notes" means the Line of Credit Note(s) described in Section 1.
2.4 "Account" means a trade account, account receivable, other receivable,
or other right to payment for goods sold or leased or services
rendered owing to the Borrower (or to a third party grantor acceptable
to the Bank).
2.5 "Account Debtor" means the person or entity obligated upon an Account.
2.6 "Affiliate" means any person, corporation or other entity directly or
indirectly controlling, controlled by or under common control with the
Borrower and any director or officer of the Borrower or any subsidiary
of the Borrower.
2.7 "Distributions" means all dividends and other distributions made by
the Borrower to its shareholders, partners, owners or members, as the
case may be, other than salary, bonuses, and other compensation for
services expended in the current accounting period.
2.8 "Domestic Eligible Accounts" means, at any time, all of the Borrower's
Accounts which contain selling terms and conditions acceptable to the
Bank. The net amount of any Eligible Account against which the
Borrower may borrow shall exclude all returns, discounts, credits, and
offsets of any nature. Unless otherwise agreed to by the Bank in
writing, Eligible Accounts do not include Accounts: (1) with respect
to which the Account Debtor is an employee or agent of the Borrower;
(2) with respect to which the Account Debtor is affiliated with or
related to the Borrower; (3) with respect to which goods are placed on
consignment, guaranteed sale, or other terms by reason of which the
payment by the Account Debtor may be conditional; (4) with respect to
which the Account Debtor is not a resident of the United States,
except to the extent such Accounts are supported by insurance, bonds
or other assurances satisfactory to the Bank; (5) with respect to
which the Borrower is or may become liable to the Account Debtor for
goods sold or services rendered by the Account Debtor to the Borrower;
(6) which are subject to dispute, counterclaim, or setoff; (7) with
respect to which the goods have not been shipped or delivered, or the
services have not been rendered, to the Account Debtor; (8) with
respect to which the Bank, in its sole discretion, deems the
creditworthiness or financial condition of the Account Debtor to be
unsatisfactory; (9) of any Account Debtor who has filed or has had
filed against it a petition in bankruptcy or an application for relief
under any provision of any state or federal bankruptcy, insolvency, or
debtor-in-relief acts; or who has had appointed a trustee, custodian,
or receiver for the assets of such Account Debtor; or who has made an
assignment for the benefit of creditors or has become insolvent or
fails generally to pay its debts (including its payrolls) as such
debts become due; (10) with respect to which the Account Debtor is the
United States government or any department or agency of the United
States; (11) which have not been paid in full within ninety (90) days
from the invoice date and.(12) In no event will the balance of any
Account of any single Account Debtor be eligible whenever the portion
of the Account which has not been paid within ninety (90) days from
the invoice date is in excess of 25% of the total amount outstanding
on the Account.
2.9 "Foreign Eligible Accounts" means, at any time, all of the Borrower's
Accounts which contain selling terms and conditions acceptable to the
Bank. The net amount of any Eligible Account against which the
Borrower may borrow shall exclude all returns, discounts, credits, and
offsets of any nature. Unless otherwise agreed to by the Bank in
writing, Eligible Accounts do not include Accounts: (1) with respect
to which the Account Debtor is an employee or agent of the Borrower;
(2) with respect to which the Account Debtor is affiliated with or
related to the Borrower; (3) with respect to which goods are placed on
consignment, guaranteed sale, or other terms by reason of which the
payment by the Account Debtor may be conditional; (4) with respect to
which the Borrower is or may become liable to the Account Debtor for
goods sold or services rendered by the Account Debtor to the Borrower;
(5) which are subject to dispute, counterclaim, or setoff; (6) with
respect to which the goods have not been shipped or delivered, or the
services have not been rendered, to the Account Debtor; (7) with
respect to which the Bank, in its sole discretion, deems the
creditworthiness or financial condition of the Account Debtor to be
unsatisfactory; (8) of any Account Debtor who has filed or has had
filed against it a petition in bankruptcy or an application for relief
under any provision of any state or federal bankruptcy, insolvency, or
debtor-in-relief acts; or who has had appointed a trustee, custodian,
or receiver for the assets of such Account Debtor; or who has made an
assignment for the benefit of creditors or has become insolvent or
fails generally to pay its debts (including its payrolls) as such
debts become due; (9) with respect to which the Account Debtor is the
United States government or any department or agency of the United
States; (10) which have not been paid in full within one hundred
twenty (120) days from the invoice date; and (11) In no event will the
balance of any Account of any single Account Debtor be eligible
whenever the portion of the Account which has not been paid within
one hundred twenty (120) days from the invoice date is in excess of
25% of the total amount outstanding on the Account.
2.10 "Eligible Inventory" means, at any time, all of the Borrower's
Inventory except: (1) Inventory which is not owned by the Borrower
free and clear of all security interests, liens, encumbrances, and
claims of third parties; (2) Inventory which the Bank, in its sole
discretion, deems to be obsolete, unsalable, damaged, defective, or
unfit for further processing; and (3) Work in process.
2
2.11 "Inventory" means all of the Borrower's raw materials, work in
process, finished goods, merchandise, parts and supplies, of every
kind and description, and goods held for sale or lease or furnished
under contracts of service in which the Borrower now has or
hereafter acquires any right, whether held by the Borrower or
others, and all documents of title, warehouse receipts, bills of
lading, and all other documents of every type covering all or any ?
of the foregoing. Inventory includes inventory temporarily out of
the Borrower's custody or possession and ? returns on Accounts.
2.12 "Intangible Assets" means the aggregate amount of all assets
classified as intangible assets under generally accepted accounting
principles, including, without limitation, goodwill, trademarks,
patents, copyrights, organization expenses, prepaid expenses,
franchises, licenses, trade names, brand names, mailing lists,
catalogs, excess of cost over book value of assets acquired, and
bond discount and underwriting expenses.
2.13 "Subordinated Debt" means debt subordinated to the Bank in manner
and by agreement satisfactory to the Bank.
2.14 "Tangible Capital Funds" means Tangible Net Worth plus Subordinated
Debt less Intangibles.
2.15 "Tangible Net Worth" means total assets less the sum of Intangible
Assets, and total liabilities.
3. Conditions Precedent.
3.1 Conditions Precedent to Initial Extension of Credit. Before the
first extension of credit governed by this agreement, whether by
disbursement of a loan, issuance of a letter of credit, or
otherwise, the Borrower shall deliver to the Bank, in form and
substance satisfactory to the Bank:
A. Loan Documents. The Notes, and as applicable, the letter of
credit applications, the security agreements, the pledge agreements,
financing statements, mortgages or deeds of trust, the guaranties,
the subordination agreements, and any other loan documents which the
Bank may reasonably require to give effect to the transactions
described in this agreement;
B. Evidence of Due Organization and Good Standing. Evidence,
satisfactory to the Bank, of the ? organization and good standing of
the Borrower and every other business entity that is a party to this
agreement or any other loan document required by this agreement; and
C. Evidence of Authority to Enter into Loan Documents. Evidence
that (i) each party to this agreement and any other loan document
required by this agreement is authorized to enter into the
transactions described in this agreement and the other loan
documents, and (ii) the person signing on behalf of each such party
is authorized to do.
3.2 Conditions Precedent to Each Extension of Credit. Before any
extension of credit governed by this agreement, whether by
disbursement of a loan, issuance of a letter of credit or otherwise,
the following conditions must be satisfied:
A. Representations. The representations of the Borrower are true
on and as of the date of the extension of credit;
B. No Event of Default. No default has occurred in any provision
of this agreement and is continuing or would result from the
extension of credit, and no event has occurred which would
constitute the occurrence of any default but for the lapse of time
until the end of any grace or cure period; and
C. Additional Approvals, Opinions, and Documents. The Bank has
received any other approvals, opinions and documents as it may
reasonably request.
4. Affirmative Covenants. The Borrower shall:
4.1 Insurance. Maintain insurance with financially sound and reputable
insurers covering its properties and business against those
casualties and contingencies and in the types and amounts as are in
accordance with sound business and industry practices.
4.2 Existence. Maintain its existence and business operations as
presently in effect in accordance with all applicable laws and
regulations, pay its debts and obligations when due under normal
terms, and pay on or before their due date, all taxes, assessments,
fees and other governmental monetary obligations, except as they may
be contested in good faith if they have been properly reflected on
its books and, at the Bank's request, adequate funds or security has
been pledged to insure payment.
3
4.3 Financial Records. Maintain proper books and records of account, in
accordance with generally accepted accounting principles, and
consistent with financial statements previously submitted to the Bank.
4.4 Inspection. Permit the Bank to inspect and copy the Borrower's
business records at such times and at such intervals as the Bank may
reasonably require, and to discuss the Borrower's business,
operations, and financial condition with the Borrower's officers and
accountants.
4.5 Financial Reports. Furnish to the Bank whatever information, books and
records the Bank may reasonably request, including at a minimum:
A. Within sixty (60) days after each quarterly period, a balance sheet
as of the end of that period and statements of income, cash flow and
retained earnings, from the beginning of that fiscal year to the end
of that period, certified as correct by one of its authorized agents.
B. Within one hundred and twenty (120) days after and as of the end of
each of its fiscal years, a detailed financial statement including a
balance sheet and statements of income, cash flow and retained
earnings, such financial statement, to be audited by an independent
certified public accountant of recognized standing acceptable to the
Bank in the Bank's sole discretion.
C. Within thirty (30) days after and as of the end of each calendar
month, the following lists, each certified as correct by one of its
authorized agents:
(1) a list of accounts receivable, aged from date of invoice,
and
(2) a list of inventory, valued at the lower of cost or market.
D. Within thirty (30) days after each monthly period, the Borrower
shall deliver to the Bank a borrowing base certificate, in form and
detail satisfactory to the Bank, along with such supporting
documentation as the Bank may request.
4.6 Notices of Claims, Litigation, Defaults, etc. Promptly inform the Bank
in writing of (1) all existing and all threatened litigation, claims,
investigations, administrative proceedings and similar actions
affecting the Borrower which could materially affect the financial
condition of the Borrower; (2) the occurrence of any event which gives
rise to the Bank's option to terminate the Credit Facilities; (3) the
institution of steps by the Borrower to withdraw from, or the
institution of any steps to terminate, any employee benefit plan as to
which the Borrower may have liability; (4) any additions to or changes
in the locations of the Borrower's businesses; and (5) any alleged
breach of any provision of this agreement or of any other agreement
related to the Credit Facilities by the Bank.
4.7 Additional Information. Furnish such additional information and
statements, as the Bank may request, from time to time.
4.8 Insurance Reports. Furnish to the Bank, upon request of the Bank,
reports on each existing insurance policy showing such information as
the Bank may reasonably request.
4.9 Other Agreements. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between the Borrower
and any other party.
4.10 Title to Assets and Property. Maintain good and marketable title to
all of the Borrower's assets and properties.
4.11 Additional Assurances. Make, execute and deliver to the Bank such
other agreements as the Bank may reasonably request to evidence the
Credit Facilities and to perfect any security interests.
4.12 Employee Benefit Plans. Maintain each employee benefit plan as to
which the Borrower may have any liability, in compliance with all
applicable requirements of law and regulations.
4.13 Depository Relationship. Maintain its primary banking relationship
with the Bank and establish such accounts and maintain balances
therein with the Bank sufficient to cover the cost of all the Bank's
services provided; provided, however, that nothing herein shall
require the Borrower to keep and maintain a specific minimum balance
in such accounts.
4
4.14 Compliance Certificates. Provide the Bank, within sixty (60) days
after the end of each fiscal quarter, with a certificate executed by
the Borrower's chief financial officer, or other officer or a person
acceptable to the Bank, certifying that, as of the date of the
certificate, no default exists under any provision of this agreement.
5. Negative Covenants.
5.1 Unless otherwise noted, the financial requirements set forth in this
section will be computed in accordance with generally accepted
accounting principles applied on a basis consistent with financial
statements previously submitted by the Borrower to the Bank.
5.2 Without the written consent of the Bank, the Borrower will not:
A. Dividends. Acquire or retire any of its shares of capital stock, or
declare or pay dividends or make any other distributions upon any of
its shares of capital stock, except in the absence of the occurrence
of any default, dividends in its capital stock and dividends payable
to "Sub-S" corporation shareholders sufficient in amount to pay their
income tax obligation related to the Borrower's taxable income.
B. Sale of Shares. Issue, sell or otherwise dispose of any shares of
its capital stock or other securities, or rights, warrants or options
to purchase or acquire those shares or securities.
C. Debt. Incur, or permit to remain outstanding, debt for borrowed
money or installment obligations, except debt reflected in the latest
financial statement of the Borrower furnished to the Bank prior to
execution of this agreement and not to be paid with proceeds of
borrowings under the Credit Facilities. For purposes of this covenant,
the sale of any account receivable is the incurring of debt for
borrowed money.
D. Guaranties. Guarantee or otherwise become or remain secondarily
liable on the undertaking of another, except for endorsement of drafts
for deposit and collection in the ordinary course of business.
E. Liens. Create or permit to exist any lien on any of its property,
real or personal, except: existing liens known to the Bank; liens to
the Bank; liens incurred in the ordinary course of business securing
current nondelinquent liabilities for taxes, worker's compensation,
unemployment insurance, social security and pension liabilities.
F. Use of Proceeds. Use, or permit any proceeds of the Credit
Facilities to be used, directly or indirectly, for the purpose of
"purchasing or carrying any margin stock" within the meaning of
Federal Reserve Board Regulation U. At the Bank's request, the
Borrower will furnish a completed Federal Reserve Board Form U-1.
G. Continuity of Operations. (1) Engage in any business activities
substantially different from those in which the Borrower is presently
engaged; (2) cease operations, liquidate, merge, transfer, acquire or
consolidate with any other entity, change its name, dissolve, or sell
any assets out of the ordinary course of business; or (3) enter into
any arrangement with any person providing for the leasing by the
Borrower to any subsidiary of real or personal property which has been
sold or transferred by the Borrower or subsidiary to such person.
H. Limitation on Negative Pledge Clauses. Enter into any agreement
with any person other than the Bank which prohibits or limits the
ability of the Borrower or any of its subsidiaries to create or permit
to exist any lien on any of its property, assets or revenues, whether
now owned or hereafter acquired.
I. Conflicting Agreements. Enter into any agreement containing any
provision which would be violated or breached by the performance of
the Borrower's obligations under this agreement.
J. Transfer of Ownership. Permit any pledge of any ownership interest
in the Borrower, or any sale or other transfer of any ownership
interest in the Borrower.
K. Tangible Capital Funds. Permit as of each fiscal quarter end, the
Borrower and its subsidiaries' Tangible Capital Funds to be less than
$3,500,000.00.
L. Leverage Ratio. Permit as of each fiscal quarter end, the Borrower
and its subsidiaries' ratio of total liabilities to Tangible Capital
Funds to be greater than 3.75 to 1.00.
M. Debt Service Coverage Ratio. Permit as of each fiscal quarter end,
the Borrower and its subsidiaries' ratio of earnings before interest
and taxes, plus depreciation, minus any distributions and unfunded
capital expenditures,
5
for the three month period then ending to interest expense, prior
period current maturities of long term debt and capital leases, to be
less than 1.00 to 1.00.
6. Representations.
6.1 Representations by the Borrower. Each Borrower represents that: (a)
the execution and delivery of this agreement and the Notes, and the
performance of the obligations they impose, do not violate any law,
conflict with any agreement by which it is bound, or require the
consent or approval of any governmental authority or other third
party, (b) this agreement and the Notes are valid and binding
agreements, enforceable according to their terms, (c) all balance
sheets, profit and loss statements, and other financial statements and
other information furnished to the Bank in connection with the
Liabilities are accurate and fairly reflect the financial condition of
the organizations and persons to which they apply on their effective
dates, including contingent liabilities of every type, which financial
condition has not changed materially and adversely since those dates,
(d) no litigation, claim, investigation, administrative proceeding or
similar action (including those for unpaid taxes) against the Borrower
is pending or threatened, and no other event has occurred which may in
any one case or in the aggregate materially adversely affect the
Borrower's financial condition and properties, other than litigation,
claims, or other events, if any, that have been disclosed to and
acknowledged by the Bank in writing, (e) all of the Borrower's tax
returns and reports that are or were required to be filed, have been
filed, and all taxes, assessments and other governmental charges have
been paid in full, except those presently being contested by the
Borrower in good faith and for which adequate reserves have been
provided, (f) the Borrower is not a "holding company" or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940. as amended. (g) the Borrower is not a
"holding company", or a "subsidiary company" of a "holding company" or
an "affiliate" of a "holding company" or of a "subsidiary company" of
a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, (h) there are no defenses or
counterclaims, offsets or adverse claims, demands or actions of any
kind, personal or otherwise, that the Borrower could assert with
respect to this agreement or the Credit Facilities, (i) the Borrower
owns, or is licensed to use, all trademarks, trade names, copyrights,
technology, know-how and processes necessary for the conduct of its
business as currently conducted, and (j) no part of the proceeds of
the Credit Facilities will be used for "purchasing" or "carrying" any
"margin stock" within the respective meanings of each of the quoted
terms under Regulation U of the Board of Governors of the Federal
Reserve System of the United States (the "Board") as now and from time
to time hereafter in effect or for any purpose which violates the
provisions of any regulations of the Board. Each Borrower, other than
a natural person, further represents that: (a) it is duly organized,
existing and in good standing pursuant to the laws under which it is
organized, and (b) the execution and delivery of this agreement and
the Notes and the performance of the obligations they impose (i) are
within its powers, (ii) have been duly authorized by all necessary
action of its governing body, and (iii) do not contravene the terms of
its articles of incorporation or organization, its by-laws, or any
partnership, operating or other agreement governing its affairs.
6.2 Representations Regarding Assets. With respect to any asset of the
Borrower utilized in the calculation of the Borrowing Base set forth
in this agreement, the Borrower represents and warrants to the Bank:
(1) each asset represented by the Borrower to be eligible for
Borrowing Base purposes of this agreement conforms to the eligibility
definitions set forth in this agreement (2) all asset values delivered
to the Bank will be true and correct, subject to immaterial variance;
and be determined on a consistent accounting basis; (3) except as
agreed to the contrary by the Bank in writing, each asset is now and
at all times hereafter will be in the Borrower's physical possession
and shall not be held by others on consignment, sale or approval, or
sale or return; (4) except as reflected in schedules delivered to the
Bank, each asset is now and at all times hereafter will be of good and
merchantable quality, free from defects; (5) each asset is not now and
will not at any time hereafter be stored with a bailee, warehouseman,
or similar party without the Bank's prior written consent, and in such
event, the Borrower will concurrently at the time of bailment cause
any such bailee, warehouseman, or similar party to issue and deliver
to the Bank, warehouseman receipts in the Bank's name evidencing the
storage of the assets; and (6) the Bank, its assigns, or agents shall
have the right at any time and at the Borrower's expense to inspect,
examine and audit the Borrower's records, and if Accounts are included
in the calculation of Borrowing Base, confirm with Account Debtors the
accuracy of such Accounts, and inspect and examine the assets and
to check and test the same as to quality, quantity, value, and
condition.
7. Default/Remedies. If any of the Credit Facilities are not paid at maturity,
whether by acceleration or otherwise, or if a default by anyone occurs
under the terms of this agreement, the Notes or any agreement related to
the Credit Facilities, then the Bank shall have all of the rights and
remedies provided by any law or agreement.
8. Miscellaneous.
8.1. Notice. Any notices and demands under or related to this document
shall be in writing and delivered to the intended party at its address
stated herein, and if to the Bank, at its main office if no other
address of the Bank is specified herein,
6
by one of the following means: (a) by hand, (b) by a nationally
recognized overnight courier service, or (c) by certified mail,
postage prepaid, with return receipt requested. Notice shall be deemed
given: (a) upon receipt if delivered by hand. (b) on the Delivery Day
after the day of deposit with a nationally recognized courier service,
or (c) on the third Delivery Day after the notice is deposited in the
mail. "Delivery Day" means a day other than a Saturday, a Sunday or
any other day on which national banking associations are authorized to
be closed. Any party may change its address for purposes of the
receipt of notices and demands by giving notice of such change in the
manner provided in this provision.
8.2 No Waiver. No delay on the part of the Bank in the exercise of any
right or remedy waives that right or remedy. No single or partial
exercise by the Bank of any right or remedy precludes any other future
exercise of it or the exercise of any other right or remedy. No waiver
or indulgence by the Bank of any default is effective unless it is in
writing and signed by the Bank, nor shall a waiver on one occasion bar
or waive that right on any future occasion.
8.3 Integration. This agreement, the Notes, and any agreement related to
the Credit Facilities embody the entire agreement and understanding
between the Borrower and the Bank and supersede all prior agreements
and understandings relating to their subject matter. If any one or
more of the obligations of the Borrower under this agreement or the
Notes is invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining obligations of
the Borrower shall not in any way be affected or impaired, and the
invalidity, illegality or unenforceability in one jurisdiction shall
not affect the validity, legality or enforceability of the obligations
of the Borrower under this agreement or the Notes in any other
jurisdiction.
8.4 Joint and Several Liability. Each Borrower, if more than one, is
jointly and severally liable.
8.5 Governing Law and Venue. This agreement is delivered in the State of
Illinois and governed by Illinois law (without giving effect to its
laws of conflicts). The Borrower agrees that any legal action or
proceeding with respect to any of its obligations under this agreement
may be brought by the Bank in any state or federal court located in
the State of Illinois, as the Bank in its sole discretion may elect.
By the execution and delivery of this agreement, the Borrower submits
to and accepts, for itself and in respect of its property, generally
and unconditionally, the non-exclusive jurisdiction of those courts.
The Borrower waives any claim that the State of Illinois is not a
convenient forum on the proper venue for any such suit, action or
proceeding.
8.6 Captions. Section headings are for convenience of reference only and
do not affect the interpretation of this agreement.
8.7 Subsidiaries and Affiliates of the Borrower. To the extent the context
of any provisions of this agreement makes it appropriate, including
without limitation any representation, warranty or covenant, the word
"Borrower" as used in this agreement shall include all of the
Borrower's subsidiaries and affiliates. Notwithstanding the foregoing,
however, under no circumstances shall this agreement be construed to
require the Bank to make any loan or other financial accommodation to
any of the Borrower's subsidiaries or affiliates.
8.8 Survival of Representations and Warranties. The Borrower understands
and agrees that in extending the Credit Facilities, the Bank is
relying on all representations, warranties, and covenants made by the
Borrower in this agreement or in any certificate or other instrument
delivered by the Borrower to the Bank under this agreement. The
Borrower further agrees that regardless of any investigation made by
the Bank, all such representations, warranties and covenants will
survive the making of the Credit Facilities and delivery to the Bank
of this agreement, shall be continuing in nature, and shall remain in
full force and effect until such time as the Borrower's indebtedness
to the Bank shall be paid in full.
8.9 Non-Liability of the Bank. The relationship between the Borrower and
the Bank created by this agreement is strictly a debtor and creditor
relationship and not fiduciary in nature, nor is the relationship to
be construed as creating any partnership or joint venture between the
Bank and the Borrower. The Borrower is exercising the Borrower's own
judgement with respect to the Borrower's business. All information
supplied to the Bank is for the Bank's protection only and no other
party is entitled to rely on such information. There is no duty for
Bank to review, inspect, supervise or inform the Borrower of any
matter with respect to the Borrower's business. The Bank and the
Borrower intend that the Bank may reasonably rely on all information
supplied by the Borrower to the Bank, together with all
representations and warranties given by the Borrower to the Bank,
without investigation or confirmation by the Bank and that any
investigation or failure to investigate will not diminish the Bank's
right to so rely.
8.10 Indemnification of the Bank. The Borrower agrees to indemnify, defend
and hold the Bank and BANK ONE CORPORATION, or any of its subsidiaries
or affiliates or their successors, and each of their respective
shareholders, directors, officers, employees and agents (collectively,
the "Indemnified Persons") harmless from any and all obligations,
claims, liabilities, losses, damages, penalties, fines, forfeitures,
actions, judgments, suits, costs,
7
expenses and disbursements of any kind or nature (including, without
limitation, any Indemnified Person's attorneys' fees) (collectively,
the "Claims") which may be imposed upon, incurred by or assessed
against any Indemnified Person (whether or not caused by any
Indemnified Person's sole, concurrent, or contributory negligence)
arising out of or relating to this agreement; the exercise of the
rights and remedies granted under this agreement (including, without
limitation, the enforcement of this agreement and the defense of any
Indemnified Persons action or inaction in connection with this
agreement); and in connection with the Borrower's failure to perform
all of the Borrower's obligations under this agreement, except to the
limited extent that the Claims against any such Indemnified Person are
proximately caused by such Indemnified Person's willful misconduct.
The indemnification provided for in this section shall survive the
termination of this agreement and shall extend to and continue to
benefit each individual or entity who is or has at any time been an
Indemnified Person.
The Borrower's indemnity obligations under this section shall not in
any way be affected by the presence or absence of covering insurance,
or by the amount of such insurance or by the failure or refusal of any
insurance carrier to perform any obligation on its part under any
insurance policy or policies affecting the Borrower's assets or the
Borrower's business activities. Should any Claim be made or brought
against any Indemnified Person by reason of any event as to which the
Borrower's indemnification obligations apply, then, upon any
Indemnified Person's demand, the Borrower, at its sole cost and
expense, shall defend such Claim in the Borrower's name, if necessary,
by the attorneys for the Borrower's insurance carrier (if such Claim
is covered by insurance), or otherwise by such attorneys as any
Indemnified Person shall approve. Any Indemnified Person may also
engage its own attorneys at its reasonable discretion to defend the
Borrower and to assist in its defense and the Borrower agrees to pay
the fees and disbursements of such attorneys.
8.11 Counterparts. This agreement may be executed in multiple counterparts,
each of which, when so executed, shall be deemed an original, but all
such counterparts, taken together, shall constitute one and the same
agreement.
8.12 Sole Discretion of the Bank. Whenever the Bank's consent or approval
is required under this agreement, the decision as to whether or not to
consent or approve shall be in the sole and exclusive discretion of
the Bank and the Bank's decision shall be final and conclusive.
8.13 Advice of Counsel. The Borrower acknowledges that it has been advised
by counsel, or had the opportunity to be advised by counsel, in the
negotiation, execution and delivery of this agreement and any
documents executed and delivered in connection with the Credit
Facilities.
8.14 Recovery of Additional Costs. If the imposition of or any change in
any law, rule, regulation, or guideline, or the interpretation or
application of any thereof by any court or administrative or
governmental authority (including any request or policy not having the
force of law) shall impose, modify, or make applicable any taxes
(except federal, state, or local income or franchise taxes imposed on
the Bank), reserve requirements, capital adequacy requirements, or
other obligations which would (A) increase the cost to the Bank for
extending or maintaining the Credit Facilities, (B) reduce the amounts
payable to the Bank under the Credit Facilities, or (C) reduce the
rate of return on the Bank's capital as a consequence of the Bank's
obligations with respect to the Credit Facilities, then the Borrower
agrees to pay the Bank such additional amounts as will compensate the
Bank therefor, within five (5) days after the Bank's written demand
for such payment. The Bank's demand shall be accompanied by an
explanation of such imposition or charge and a calculation in
reasonable detail of the additional amounts payable by the Borrower,
which explanation and calculations shall be conclusive in the absence
of manifest error.
8.15 Conflicting Terms. If this agreement is inconsistent with any
provision in any agreement related to the Credit Facilities, the Bank
shall determine, in the Bank's sole and absolute discretion, which of
the provisions shall control any such inconsistency.
8.16 Expenses. The Borrower agrees to pay or reimburse the Bank for all its
out-of-pocket costs and expenses and reasonable attorneys' fees
(including the fees of in-house counsel) incurred in connection with
the development, preparation and execution of, and in connection with
the enforcement or preservation of any rights under, this agreement,
any amendment, supplement, or modification thereto, and any other
documents prepared in connection herewith or therewith. These costs
and expenses include without limitation any costs or expenses incurred
by the Bank in any bankruptcy, reorganization, insolvency or other
similar proceeding.
9. WAIVER OF SPECIAL DAMAGES. THE BORROWER WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT THE UNDERSIGNED MAY HAVE TO CLAIM OR RECOVER
FROM THE BANK IN ANY LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES.
8
10. JURY WAIVER. THE BORROWER AND THE BANK HEREBY VOLUNTARILY, KNOWINGLY,
IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE
IN RESOLVING ANY DISPUTE WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE)
BETWEEN THE BORROWER AND THE BANK ARISING OUT OF OR IN ANY WAY RELATED TO
THIS DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO
PROVIDE THE FINANCING DESCRIBED HEREIN.
Dated: 5/30, 2002
Address(es) for Notices: Borrower:
0000 Xxxxxxxx Xxxx Alltech Associates, Inc.
Xxxxxxxxx, XX 00000
Attn: XXXXXXX XXXXXX By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
XXXXXXX XXXXXX CFO
Printed Name Title
Date: 5/20/02
Address for Notices: Bank:
000 X. Xxxxx Xxxxxx American National Bank and Trust Company
of Chicago
Xxxxx Xxxxxxxx, XX 00000
Attn: Xxxxxx X. X'Xxxxx By: Xxxxxx X. X'Xxxxx
-----------------------------------------
Xxxxxx X. X'Xxxxx First Vice President
Printed Name Title
Date: 5/30/02
9
