Exhibit 10.9
CREDIT AGREEMENT
DATED AS OF August 11, 2000
BETWEEN
THE BOARD OF TRADE OF THE CITY OF CHICAGO, INC.
AND
BANK ONE, NA
TABLE OF CONTENTS
1 DEFINITIONS...........................................................1
2 THE LOANS.............................................................9
2.1 The Loans....................................................9
2.2 Commitment Fees and Reduction of the Commitment..............9
2.3 Method of Selecting Rate Options and Interest Periods........9
2.4 Mandatory Reductions of Commitment; Mandatory Prepayments...10
2.5 Method of Payment...........................................11
2.6 The Note; Telephonic Notices................................11
2.7 Interest Payment Dates; Interest Basis......................12
2.8 Extension of Revolving Credit Termination Date..............12
3 CHANGE IN CIRCUMSTANCES..............................................12
3.1 Yield Protection............................................12
3.2 Availability of Eurodollar Rate Loans.......................13
3.3 Funding Indemnification.....................................13
3.4 Bank Statements: Survival of Indemnity......................14
4 CONDITIONS PRECEDENT.................................................14
4.1 Initial Loan................................................14
4.2 Each Loan...................................................14
5 REPRESENTATIONS AND WARRANTIES.......................................14
5.1 Corporate Existence and Standing............................14
5.2 Authorization and Validity..................................15
5.3 No Conflict; Government Consent.............................15
5.4 Financial Statements........................................15
5.5 Material Adverse Change.....................................15
5.6 Litigation and Contingent Obligations.......................15
5.7 Regulation U................................................16
5.8 Compliance With Laws........................................16
5.9 Taxes.......................................................16
5.10 Subsidiaries................................................16
5.11 ERISA.......................................................16
5.12 Accuracy of Information.....................................16
5.13 Material Agreements.........................................17
5.14 Ownership of Properties.....................................17
5.15 Investment Company Act......................................17
5.16 Public Utility Holding Company Act..........................17
5.17 Insurance...................................................17
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TABLE OF CONTENTS
(continued)
6 COVENANTS............................................................17
6.1 Financial Reporting.........................................17
6.2 Use of Proceeds.............................................19
6.3 Notice of Default...........................................20
6.4 Conduct of Business.........................................20
6.5 Taxes.......................................................20
6.6 Insurance...................................................20
6.7 Compliance with Laws........................................20
6.8 Maintenance of Properties...................................20
6.9 Inspection..................................................20
6.10 Indebtedness................................................21
6.11 Merger......................................................21
6.12 Sale of Assets..............................................22
6.13 Sale of Accounts............................................22
6.14 Sale and Leaseback..........................................22
6.15 Investments and Acquisitions................................22
6.16 Liens.......................................................23
6.17 Dividends...................................................24
6.18 EBITDA Ratio................................................24
6.19 Net Worth...................................................24
6.20 Capital Expenditures........................................25
7 DEFAULTS.............................................................25
8 ACCELERATION AND REMEDIES............................................27
8.1 Acceleration................................................27
8.2 Preservation of Rights......................................27
9 GENERAL PROVISIONS...................................................27
9.1 Survival of Representations.................................27
9.2 Taxes.......................................................27
9.3 Expenses; Indemnification...................................27
9.4 CHOICE OF LAW...............................................28
9.5 Successors and Assigns......................................28
9.6 Dissemination of Information................................28
9.7 Giving Notice...............................................29
9.8 Accounting..................................................29
9.9 Severability of Provisions..................................29
9.10 Nonliability of Bank........................................29
9.11 Setoff......................................................29
9.12 Counterparts................................................29
9.13 CONSENT TO JURISDICTION.....................................30
9.14 WAIVER OF JURY TRIAL........................................30
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TABLE OF CONTENTS
(continued)
Schedule 5.6...............Litigation
Schedule 5.10..............Subsidiaries
Schedule 5.14..............Properties
Schedule 6.10..............Existing Indebtedness
Schedule 6.15..............Existing Investments
Schedule 6.16..............Existing Liens
EXHIBIT A..................Note
EXHIBIT B .................Form of Compliance Certificate
EXHIBIT C..................Form of Borrowing Base Certificate
EXHIBIT D..................Form of Security Agreement
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CREDIT AGREEMENT
This Credit Agreement (as amended or modified and in effect from time
to time, this "Agreement"), dated as of August 11, 2000, is between the Board of
Trade of the City of Chicago, Inc., a Delaware not-for-profit corporation (the
"Company"), and Bank One, NA, a national banking association with its main
office in Chicago, Illinois (the "Bank"). The parties hereto agree as follows:
1. DEFINITIONS.
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"Account Debtor" means any Person who is obligated to the Company under
an Account Receivable.
"Account Receivable" means all amounts payable to the Company in
respect of exchange fees, membership fees, membership dues and quotation fees
and all rights of the Company to payment for services rendered (whether or not
evidenced by an instrument or chattel paper and whether or not yet earned by
performance).
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Company or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any person or division thereof, whether
through purchase of assets, merger or otherwise, or (ii) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the outstanding
partnership interests of a partnership or membership interests in a limited
liability company.
"Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect for the period covered by the financial statements
referred to in Section 5.4, applied in a manner consistent with that used in
preparing such financial statements.
"Alternate Base Rate" means, on any date and with respect to all
Floating Rate Loans, a fluctuating rate of interest per annum equal to the
higher of (i) the Prime Rate, and (ii) the sum of the Federal Funds Effective
Rate most recently determined by the Bank plus 1/2% per annum. Changes in the
rate of interest on that portion of any Loan maintained as a Floating Rate Loan
will take effect simultaneously with each change in the Alternate Base Rate.
"Asset Sale" means the sale, lease, assignment or other transfer for
value by the Company or any Subsidiary to any Person (other than the Company or
any Subsidiary) of any asset or right of the Company or such Subsidiary, other
than (i) sales of inventory in the ordinary course of business and (ii) sales of
outmoded, obsolete or unnecessary equipment in the ordinary course of business
consistent with past practice.
"Authorized Financial Officer" means any of the Chief Financial
Officer, the Treasurer or any Assistant Treasurer of the Company, acting singly.
"Borrowing Base" means an amount equal to the total of 80% of the
unpaid amount (net of such reserves and allowances as the Bank deems reasonably
necessary) of all Eligible Accounts Receivable.
"Borrowing Base Certificate" means a certificate substantially in the
form of Exhibit "C".
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Rate Loans, a day (other than Saturday or Sunday) on
which banks are open for business in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market and (ii)
for all other purposes, a day other than Saturday or Sunday on which banks are
open for business in Chicago for the conduct of substantially all of their
commercial lending activities.
"Capital Expenditures" means all expenditures which, in accordance with
Agreement Accounting Principles, would be required to be capitalized and shown
on the consolidated balance sheet of the Company, but excluding (a) expenditures
made in connection with the replacement, substitution or restoration of assets
to the extent financed (i) from insurance proceeds (or other similar recoveries)
paid on account of the loss of or damage to the assets being replaced or
restored or (ii) with awards of compensation arising from the taking by eminent
domain or condemnation of the assets being replaced; and (b) expenditures
relating to long-term leases on behalf of tenants under such leases.
"Change in Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 30% or more of the outstanding shares of voting stock of the
Company.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means the obligation of the Bank to make Loans not
exceeding $10,000,000, as such amount may be modified from time to time.
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"Consolidated Net Income" shall mean the net income of the Company and
its Subsidiaries on a consolidated basis as defined according to Agreement
Accounting Principles after excluding the sum of (i) any net losses or any
undistributed net income of any minority interest held by the Company, (ii) the
gain or loss resulting from the sale of any capital assets other than in the
ordinary course of business, (iii) extraordinary or nonrecurring gains or
losses, provided they are identified as such in the Company's audited financial
statements, and (iv) any gain resulting from any write-up of assets.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement or take-or-pay contract or application for a letter of credit.
"Controlled Group" means all members of a controlled group of
corporations and all trades or business (whether or not incorporated) under
common control which, together with the Company, are treated as a single
employer under Section 414 of the Code.
"Default" means an event described in Section 7.
"EBITDA Ratio" means, as at the end of any fiscal quarter of the
Company, calculated for the period of the four consecutive fiscal quarters ended
as at such date, the ratio of (i) the sum of (a) Consolidated Net Income plus
(b) Interest Expense plus (c) applicable income taxes plus (d) amortization or
depreciation to the extent deducted in calculating Consolidated Net Income to
(ii) Interest Expense, all determined for the Company and its Subsidiaries on a
consolidated basis in accordance with Agreement Accounting Principles
consistently applied.
"Electronic Exchange Equity Offering" means an offering (including an
initial public offering) or sale of shares of a Subsidiary which (i) conducts
the Company's electronic exchange business and (ii) does not own more than 25%
of the Company's assets immediately prior to such offering.
"Eligible Account Receivable" means an Account Receivable which meets
each of the following requirements:
(1) it (a) is subject to a perfected Lien in favor of the Bank
and (b) is not subject to any other assignment, claim or Lien;
(2) it is a valid, legally enforceable and unconditional
obligation of the Account Debtor with respect thereto, and is not
subject to any counterclaim, credit, allowance, rebate, adjustment or
dispute (including any claim denying liability in whole
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or in part) by the Account Debtor with respect thereto, or to discount;
provided that in the event any counterclaim, credit, allowance, rebate,
adjustment or dispute is asserted, or discount is granted, such Account
Receivable shall only be ineligible pursuant to this clause (2) to the
extent of the same;
(3) there is no bankruptcy, insolvency or liquidation
proceeding by or against the Account Debtor with respect thereto;
(4) the Account Debtor with respect thereto is a resident or
citizen of, and is located within, the United States, unless (a) such
Account Receivable is supported by a letter of credit, banker's
acceptance or other credit support reasonably satisfactory to the Bank
or (b) such Account Debtor has been approved in writing by the Bank;
(5) it arises in the ordinary course of business of the
Company;
(6) if the Account Debtor is the United States or any
department, agency or instrumentality thereof, the Company has assigned
its right to payment of such Account Receivable to the Bank pursuant to
the Assignment of Claims Act of 1940;
(7) if the Account Receivable is evidenced by chattel paper or
an instrument, the originals of such chattel paper or instrument shall
have been endorsed and/or assigned and delivered to the Bank in a
manner satisfactory to the Bank;
(8) such Account Receivable (in the case of all Accounts
Receivable other than membership fees and membership dues) is not more
than (a) 60 days past the due date thereof or (b) 90 days past the
original invoice date thereof, in each case according to the original
terms thereof;
(9) in the case of an Account Receivable relating to
membership fees or membership dues, such Account Receivable (a) is
evidenced by an invoice issued not more than 30 days after the last day
of the period for which such membership fees or membership dues were
payable and (b) is not more than 30 days past the original invoice date
thereof, according to the original terms thereof;
(10) the Account Debtor with respect thereto is not an
Affiliate of the Company;
(11) it is not owed by an Account Debtor with respect to which
25% or more of the aggregate amount of outstanding Accounts Receivable
owed at such time by such Account Debtor is classified as ineligible
under clause (9) of this definition; and
(12) if the aggregate amount of all Accounts Receivable owed
by the Account Debtor thereon exceeds 25% of the aggregate amount of
all Accounts Receivable at such
4
time, then all Accounts Receivable owed by such Account Debtor in
excess of such amount shall be deemed ineligible.
An Account Receivable which is at any time an Eligible Account Receivable, but
which subsequently fails to meet any of the foregoing requirements, shall
forthwith cease to be an Eligible Account Receivable. Further, with respect to
any Account Receivable, if the Bank at any time hereafter reasonably determines
that the prospect of payment or performance by the Account Debtor with respect
thereto is materially impaired for any reason whatsoever, such Account
Receivable shall cease to be an Eligible Account Receivable after notice of such
determination is given to the Company.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time , and any rule or regulation issued thereunder.
"Eurodollar Base Rate" means, with respect to a Eurodollar Rate Loan
for the relevant Interest Period, the rate determined by the Bank to be the rate
at which deposits in U.S. dollars are offered by the Bank to first-class banks
in the London interbank market at approximately 11 a.m. (London time) two
Business Days prior to the first day of such Interest Period, in the approximate
amount of the relevant Eurodollar Rate Loan and having a maturity approximately
equal to such Eurodollar Interest Period.
"Eurodollar Rate" means, with respect to a Eurodollar Rate Loan for
each day during the relevant Interest Period, the sum of (i) the quotient of (a)
the Eurodollar Base Rate applicable to that Interest Period divided by (b) one
minus the Reserve Requirement (expressed as a decimal) applicable to that
Interest Period plus (ii) 0.625% per annum. The Eurodollar Rate shall be
rounded, if necessary, to the next higher 1/16 of 1%.
"Eurodollar Rate Loan" means a Loan bearing interest at the Eurodollar
Rate.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the preceding Business Day) by the Federal Reserve Bank of New
York; or if such rate is not so published for any day which is a Business Day,
the average of the quotations approximately at 10 a.m. (Chicago time) on such
day on such transactions received by the Bank from three federal funds brokers
of recognized standing selected by the Bank in its sole discretion.
"Floating Rate" means a rate per annum equal to the Alternate Base
Rate, changing when and as the Alternate Base Rate changes.
"Floating Rate Loan" means a loan which bears interest at the Floating
Rate.
5
"FRB" means the Board of Governors of the Federal Reserve System and
any successor thereto.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) obligations under capitalized leases, (vi) net liabilities
under Rate Hedging Obligations and (vii) Contingent Obligations.
"Interest Expense" means, for any period of calculation and without
duplication, all interest, whether paid in cash, accrued as a liability or
capitalized, on Indebtedness during such period (including imputed interest on
capitalized leases), all calculated for such period for the Company and its
Subsidiaries on a consolidated basis in accordance with Agreement Accounting
Principles consistently applied.
"Interest Period" means, with respect to a Eurodollar Rate Loan, a
period of one, two or three months commencing on a Business Day selected by the
Company pursuant to this Agreement. Such Interest Period shall end on (but
exclude) the day which corresponds numerically to such date one, two or three
months thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second or third succeeding month, such Interest
Period shall end on the last Business Day of such next, second or third
succeeding month. If an Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall end on the next succeeding
Business Day, provided, however, that if said next succeeding Business Day falls
in a new month, such Interest Period shall end on the immediately preceding
Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade), deposit account or contribution of capital by such Person to any other
Person or any investment in, or purchase or other acquisition of, the stock,
partnership interests, notes, debentures or other securities of any other Person
made by such Person.
"Lending Installation" means any office, branch, subsidiary or
affiliate of the Bank.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential agreement of any kind or
nature whatsoever (including without limitation, the interest of a vendor or a
lessor under a conditional sale, capitalized lease or other title retention
agreement).
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"Loan" means any loan made by the Bank to the Company pursuant to this
Agreement and the Note.
"Loan Documents" means this Agreement, the Note and the Security
Agreement.
"Material Adverse Effect" means a material adverse effect on (i) the
business, properties, condition (financial or otherwise), or results of
operations of the Company and its Subsidiaries taken as a whole, (ii) the
ability of the Company to perform its obligations under this Agreement and the
other Loan Documents or (iii) the validity or enforceability of this Agreement
or any other Loan Document or the rights or remedies of the Bank hereunder or
thereunder.
"Material Subsidiary" shall mean, with respect to a Person, each
Subsidiary of such Person that, as at any time, (a) contributed more than 5% of
such Person's net income during the period of four full consecutive fiscal
quarters of such Person immediately preceding such time, (b) has at such time
capital equal to more than 5% of the consolidated tangible net worth of such
Person at any time, (c) has at such time consolidated liabilities equal to more
than 5% of the consolidated liabilities of such Person or (d) has at such time
consolidated assets with a book value of more than 5% of the book value of the
consolidated assets of such Person and its Subsidiaries.
"Multiemployer Plan" means a Plan that is a "multiemployer plan" as
defined in Section 3(37) of ERISA to which the Company or any member of the
Controlled Group is obligated to make contributions.
"Net Cash Proceeds" means:
(a) with respect to any Asset Sale, the aggregate cash
proceeds (including cash proceeds received by way of deferred payment
of principal pursuant to a note, installment receivable or otherwise,
but only as and when received) received by the Company or any
Subsidiary pursuant to such Asset Sale net of (i) the direct costs
relating to such sale, transfer or other disposition (including sales
commissions and legal, accounting and investment banking fees) and (ii)
taxes paid or reasonably estimated by the Company to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements); and
(b) with respect to any issuance of equity securities, the
aggregate cash proceeds received by the Company or any Subsidiary
pursuant to such issuance, net of the direct costs relating to such
issuance (including sales and underwriter's commissions).
"Net Worth" means members' equity, calculated in accordance with
Agreement Accounting Principles.
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"Note" means a promissory note in substantially the form of Exhibit "A"
hereto, duly executed and delivered to the Bank by the Company, including any
amendment, modification, renewal or replacement of such promissory note.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Note, all accrued and unpaid commitment fees and all expenses,
reimbursements, indemnities and other obligations of the Company to the Bank
arising under this Agreement and the other Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Person" means any corporation, natural person, firm, joint venture,
partnership, trust, unincorporated organization, enterprise, government or any
department or agency of any government.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Company or any member of the Controlled Group has or is
reasonably expected to have any liability.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by the Bank or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as such prime rate
changes.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Rate Option" means the Alternate Base Rate or the Eurodollar Rate.
"Regulation D" means Regulation D of the FRB from time to time in
effect and shall include any successor or other regulation or official
interpretation of the FRB relating to reserve requirements applicable to member
banks of the Federal Reserve System.
8
"Regulation U" means Regulation U of the FRB and any successor
regulation thereto.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA, and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4042(a) of ERISA that it be notified within 30 days of
the occurrence of such event; provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Reserve Requirement" means with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Revolving Credit Termination Date" means August 10, 2001 (or such
later date to which the Revolving Credit Termination Date may be extended
pursuant to Section 2.8).
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Security Agreement" means a Security Agreement in the form of Exhibit
"D".
"Single Employer Plan" means a Plan maintained by the Company or any
member of the Controlled Group for employees of the Company or any member of the
Controlled Group.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Company.
"Substantial Portion" means, with respect to the Property of the
Company and its Subsidiaries, Property which (i) represents more than 10% of the
consolidated assets of the Company and its Subsidiaries as would be shown in the
consolidated financial statements of the Company and its Subsidiaries as at the
beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the Consolidated Net Income of the Company and its
Subsidiaries as reflected in the financial statements referred to in clause (i)
above.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested nonforfeitable benefits under all Single Employer Plans
exceeds the fair market value of
9
all such Plan assets allocable to such benefits, all determined as of the then
most recent valuation date for such Plans using the respective actuarial
methods, assumptions and procedures used to determine the net periodic pension
cost under Financial Accounting Standard Board No. 87 in the then most recent
actuarial report for each such Plan.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
2. THE LOANS.
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2.1 The Loans. From and including the date of this Agreement and prior
to the Revolving Credit Termination Date, the Bank agrees, on the terms and
conditions set forth in this Agreement, to make Loans to the Company from time
to time in amounts not to exceed in the aggregate at any one time outstanding
the lesser of (a) the amount of the Commitment and (b) the Borrowing Base.
Subject to the terms of this Agreement, the Company may borrow, repay and
reborrow at any time prior to the Revolving Credit Termination Date. The Loans
may be Floating Rate Loans or Eurodollar Rate Loans, or a combination thereof,
selected by the Company in accordance with Section 2.3. The Loans shall be
repaid in full on the Revolving Credit Termination Date. The Bank may book the
Loans at any Lending Installation. The Company may from time to time pay all
outstanding Floating Rate Loans, or any portion of the outstanding Floating Rate
Loans, without penalty or premium, upon giving notice to the Bank not later than
10 a.m. on the date of payment (which shall be a Business Day). A Eurodollar
Rate Loan may be paid prior to the last day of the applicable Interest Period
provided any amounts due under Section 3.3 are paid with such prepayment.
2.2 Commitment Fees and Reduction of the Commitment. The Company agrees
to pay to the Bank a commitment fee of 1/8% per annum on the daily unborrowed
amount of the Commitment from the date hereof to and including the Revolving
Credit Termination Date, payable in arrears on the last day of each quarter
hereafter and on the Revolving Credit Termination Date. The Company may
permanently reduce the Commitment in whole, or in part, in integral multiples of
$500,000, upon at least three Business Days' written notice to the Bank, which
shall specify the amount of any such reduction, provided, however, that the
amount of the Commitment may not be reduced below the outstanding principal
amount of the Loans. All accrued commitment fees shall be payable on the
effective date of any termination of the obligations of the Bank to make Loans
hereunder.
2.3 Method of Selecting Rate Options and Interest Periods. The Company
shall select the Rate Option and Interest Period applicable to each Loan from
time to time. The Company shall give the Bank irrevocable borrowing notice not
later than 10:00 a.m. Chicago time on the
10
borrowing date of each Floating Rate Loan, and three Business Days before the
borrowing date for each Eurodollar Rate Loan, specifying:
(i) the borrowing date, which shall be a Business Day, of
such Loan,
(ii) the aggregate amount of such Loan,
(iii) the Rate Option selected for such Loan, and
(iv) in the case of each Eurodollar Rate Loan, the
Interest Period applicable thereto.
Each Eurodollar Rate Loan shall bear interest from and including the first day
of the Interest Period applicable thereto to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such
Eurodollar Rate Loan. If at the end of an Interest Period for an outstanding
Eurodollar Rate Loan, the Company has failed to select a new Rate Option or to
pay such Eurodollar Rate Loan, then such Loan shall be converted to a Floating
Rate Loan on the last day of such Interest Period until paid or until the
effective date of a new Rate Option with respect thereto selected by the
Company. An outstanding Floating Rate Loan may be converted to a Eurodollar Rate
Loan at any time subject to the notice provisions applicable to Eurodollar
Loans. The Company may not select a Eurodollar Rate for a Loan if there exists a
Default or Unmatured Default hereunder. The Company shall not select an Interest
Period which would end after the Revolving Credit Termination Date. Each
Eurodollar Rate Loan shall be in the minimum amount of $3,000,000 (and in
multiples of $500,000 if in excess thereof).
2.4 Mandatory Reductions of Commitment; Mandatory Prepayments. (a) The
Commitment shall be automatically and permanently reduced upon the occurrence of
any of the following events by the amounts specified below:
(i) Upon receipt by the Company or any Subsidiary of any
Net Cash Proceeds from any Asset Sale, by an amount
equal to 100% of such Net Cash Proceeds; provided
that (x) no such reduction shall be required unless
the aggregate amount of all Net Cash Proceeds
received after the date of this Agreement, less any
portion of such Net Cash Proceeds previously applied
to reduce the Commitment, equals or exceeds $100,000;
(y) any such reduction shall be rounded down to an
integral multiple of $100,000; and (z) to the extent
that any reduction of the Commitment pursuant to this
clause (a)(i) would result in the Company being
required to prepay any Eurodollar Rate Loan prior to
the last day of an Interest Period therefor, the
Company may elect (by written notice to the Bank) to
deliver the relevant Net Cash Proceeds to the Bank to
be held as collateral hereunder (and invested from
time to time in investments selected by the Company
and reasonably acceptable to
11
the Bank), in which case the Commitment shall not be
reduced until the date or dates, and shall only be
reduced to the extent, that such Net Cash Proceed may
be applied to pay a Eurodollar Rate Loan with an
Interest Period ending on such date unless (I) the
Company directs the Bank to apply such Net Cash
Proceeds on an earlier date or (III) an Event of
Default occurs and is continuing and the Bank, in its
sole discretion, elects to apply such Net Cash
Proceeds on an earlier date).
(ii) Upon receipt by the Company or any Subsidiary of any
Net Cash Proceeds from any issuance of equity
securities of the Company or any Subsidiary
(excluding (x) any issuance of shares of capital
stock pursuant to any employee or director stock
option program, benefit plan or compensation program,
(y) any issuance by a Subsidiary to the Company or
another Subsidiary and (z) the issuance or sale of
stock pursuant to an Electronic Exchange Equity
Offering), by an amount equal to 100% of such Net
Cash Proceeds.
(b) On any day on which the Commitment is reduced pursuant to
clause (a) above, the Company shall make a prepayment of the Loans in
the amount, if any, by which the aggregate principal amount of all
Loans exceeds the Commitment, as so reduced.
(c) If on any day the aggregate principal amount of all Loans
exceeds the Borrowing Base, the Company shall promptly (and, in any
event, within three Business Days) make a prepayment of the Loans in an
amount equal to such excess.
(d) Any prepayment required pursuant to clause (b) or (c)
above shall be applied first to the outstanding Floating Rate Loans and
then to such Eurodollar Rate Loans as the Company may elect (or, in the
absence of such election, to such Eurodollar Rate Loans as the Bank may
reasonably elect). Any prepayment of a Eurodollar Rate Loan pursuant to
such clauses shall be subject to Section 3.3.
2.5 Method of Payment. All payments of principal, interest, and fees
hereunder shall be made in immediately available funds to the Bank at the Bank's
address specified on the signature pages hereto, or at any other Lending
Installation of the Bank specified in writing by the Bank to the Company, by
noon (local time at the place of payment) on the date when due. The Bank is
hereby authorized to charge the account of the Company maintained with the Bank
for each payment of principal, interest and fees as it becomes due hereunder.
2.6 The Note; Telephonic Notices. The Bank is hereby authorized to
record the principal amount of each of the Loans and each repayment on the
schedule attached to its Note, provided, however, that the failure to so record
shall not affect the Company's obligations under the Note. The Company hereby
authorizes the Bank to extend Loans and effect Rate Option
12
selections based on telephonic notices made by any person or persons the Bank in
good faith believes to be acting on behalf of the Company. The Company agrees to
deliver promptly to the Bank a written confirmation signed by an Authorized
Financial Officer, if such confirmation is requested by the Bank, of each
telephonic notice hereunder. If the written confirmation differs in any material
respect from the action taken by the Bank, the records of the Bank shall govern
absent manifest error.
2.7 Interest Payment Dates; Interest Basis. Interest accrued on a
Eurodollar Rate Loan shall be payable on the last day of its applicable Interest
Period and on any date on which the Loan is paid or prepaid, whether due to
acceleration or otherwise. Interest accrued on Floating Rate Loans shall be
payable quarterly in arrears and on the Revolving Credit Termination Date.
Interest on Floating Rate Loans bearing interest by reference to the Prime Rate
shall be calculated on the basis of a year of 365, or 366 where appropriate,
days. All other Interest and commitment fees shall be calculated for actual days
elapsed on the basis of a 360-day year. Interest shall be payable for the day a
Loan is made but not for the day of any payment on the amount paid if payment is
received prior to noon (local time at the place of payment). If any payment of
principal of or interest on a Loan shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
2.8 Extension of Revolving Credit Termination Date. The Company may
request an extension of the Revolving Credit Termination Date by submitting a
request for an extension to the Bank (an "Extension Request") no more than 60
days prior to the existing Revolving Credit Termination Date. The Extension
Request must specify the new Revolving Credit Termination Date requested by the
Company and the date (which must be at least 30 days after the Extension Request
is delivered to the Bank and not more than 15 days prior to the then existing
Revolving Credit Termination Date) as of which the Bank must respond to the
Extension Request (the "Extension Date"). The new Revolving Credit Termination
Date shall be no more than 364 days after the Revolving Credit Termination Date
in effect at the time the Extension Request is received, including the Revolving
Credit Termination Date as one of the days in the calculation of the days
elapsed. The Bank, if it wishes to extend the Revolving Credit Termination Date,
shall deliver its written consent no later than the Extension Date. Failure of
the Bank to respond by the Extension Date shall be deemed a denial of the
Extension Request.
3. CHANGE IN CIRCUMSTANCES.
-----------------------
3.1 Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or any change in the interpretation thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, adopted after the date of this
Agreement, or compliance of the Bank therewith,
13
(i) subjects the Bank or any applicable Lending
Installation to any tax, duty, charge or withholding
on or from payments due from the Company (excluding
taxation of the overall net income of the Bank or
applicable Lending Installation), or changes the
basis of taxation of payments to the Bank in respect
of its Loans or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with
or for the account of, or credit extended by, the
Bank or any applicable Lending Installation (other
than reserves and assessments taken into account in
determining the interest rate applicable to
Eurodollar Rate Loans), or
(iii) imposes any other condition the result of which is to
increase the cost to the Bank or any applicable
Lending Installation of making, funding or
maintaining loans or reduces any amount receivable by
the Bank or any applicable Lending Installation in
connection with loans, or requires the Bank or any
applicable Lending Installation to make any payment
calculated by reference to the amount of loans held
or interest received by it, by an amount deemed
material by the Bank, or
(iv) affects the amount of capital required or expected to
be maintained by the Bank or its Lending Installation
or any corporation controlling the Bank and the Bank
determines the amount of capital required is
increased by or based upon the existence of this
Agreement or its obligation to make Loans hereunder
or of commitments of this type,
then, within 15 days of demand by the Bank, the Company shall pay the Bank that
portion of such increased expense incurred (including, in the case of Section
3.1(iv), any reduction in the rate of return on capital to an amount below that
which it could have achieved but for such law, rule, regulation, policy,
guideline or directive and after taking into account the Bank's policies as to
capital adequacy) or reduction in an amount received which the Bank reasonably
and in good faith determines is attributable to making, funding and maintaining
its Loans and its Commitment. The Bank will use its best efforts to notify the
Company within 30 days after becoming aware of any event giving rise to an
increased cost or reduction in amount. Failure to give notice within said 30
days shall not prohibit the Bank from requesting payment of increased costs or
reduction under this Section 3.1, but the Company shall not be required to pay
any additional amounts for any increased costs or reductions incurred more than
30 days prior to the Bank's demand for payment.
3.2 Availability of Eurodollar Rate Loans. If the Bank determines that
maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, the Bank shall suspend the
14
availability of Eurodollar Rate Loans and require any affected Eurodollar Rate
Loan to be repaid at the end of its applicable Interest Period (or earlier, if
required by law); or if the Bank determines that (i) deposits of a type and
maturity appropriate to match fund Eurodollar Rate Loans are not available to it
or (ii) the Eurodollar Rate does not accurately reflect the cost of making or
maintaining a Eurodollar Rate Loan, then the Bank may suspend the availability
of Eurodollar Rate Loans.
3.3 Funding Indemnification. If any payment of a Eurodollar Rate Loan
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar Rate
Loan is not made on the date specified by the Company for any reason other than
default by the Bank, the Company will indemnify the Bank for any loss or cost
incurred by it resulting therefrom, including, without limitation, any loss or
cost in liquidating or employing deposits acquired to fund or maintain the
Eurodollar Rate Loan.
3.4 Bank Statements: Survival of Indemnity. To the extent reasonably
possible, the Bank shall designate an alternate Lending Installation with
respect to Eurodollar Rate Loans to reduce any liability of the Company to the
Bank under Section 3.1 or to avoid the unavailability of the Eurodollar Rate
under Section 3.2, so long as such designation is not disadvantageous to the
Bank. The Bank shall deliver a written statement as to the amount due, if any,
under Section 3.1 or 3.3. Such written statement shall set forth in reasonable
detail the calculations upon which the Bank determined such amount and shall be
final, conclusive and binding on the Company in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a
Eurodollar Rate Loan shall be calculated as though the Bank funded its
Eurodollar Rate Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the written statement shall
be payable on demand after receipt by the Company of the written statement. The
obligations of the Company under Sections 3.1 and 3.3 shall survive payment of
the Obligations and termination of this Agreement.
4. CONDITIONS PRECEDENT.
--------------------
4.1 Initial Loan. The Bank shall not be required to make the initial
Loan hereunder unless (i) the Company has furnished to the Bank such lien
searches, opinions of counsel, certificates of incumbency, resolutions, by-laws
and articles of incorporation and other documentation as the Bank may reasonably
request and (ii) the Credit Agreement dated as of March 27, 1997, as amended,
among the Company, the financial institutions party thereto and Bank One, NA
(formerly The First National Bank of Chicago), as agent, shall have been or
shall simultaneously with the initial Loan hereunder be terminated (except for
those provisions that expressly survive the termination thereof) and all loans
outstanding and other amounts owed to the lenders or the agent thereunder shall
have been or shall simultaneously with the initial Loan hereunder be paid in
full.
15
4.2 Each Loan. The Bank shall not be required to make any Loan, unless
on the applicable borrowing date (i) there exists no Default or Unmatured
Default, (ii) the representations and warranties contained in Article V are true
and correct as of such borrowing date except to the extent any such
representation or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall be true and correct on and as
of such earlier date, and (iii) all legal matters incident to the making of such
Loan shall be satisfactory to the Bank and its counsel.
5. REPRESENTATIONS AND WARRANTIES.
------------------------------
The Company represents and warrants to the Bank that:
5.1 Corporate Existence and Standing. Each of the Company and the
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted except where the failure to have such authority would not
have a Material Adverse Effect.
5.2 Authorization and Validity. The Company has the corporate power and
authority and legal right to execute and deliver this Agreement and the other
Loan Documents and to perform its obligations thereunder. The execution and
delivery by the Company of this Agreement and the other Loan Documents and the
performance of its obligations thereunder have been duly authorized by proper
corporate proceedings, and this Agreement and the other Loan Documents each
constitute legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except as enforceability may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally.
5.3 No Conflict; Government Consent. Neither the execution and delivery
by the Company of this Agreement and the other Loan Documents, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof will violate (i) in any material respect, any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on the
Company or any Subsidiary, (ii) the Company's or any Subsidiary's articles of
incorporation or by-laws, (iii) the provisions of any indenture, instrument or
material agreement to which the Company or any Subsidiary is a party or is
subject, or by which it, or its property, is bound, or conflict with or
constitute a default thereunder or (iv) result in the creation or imposition of
any Lien in, of or on the property of the Company or a Subsidiary pursuant to
the terms of any such indenture, instrument or agreement (other than the
Security Agreement). No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with the execution, delivery
and performance of, or the legality, validity, binding effect or enforceability
of, this Agreement or the other Loan Documents, other than (i) those that have
already been obtained or
16
made prior to the date of this Agreement and (ii) the filing of one or more UCC
financing statements pursuant to the Security Agreement.
5.4 Financial Statements. The December 31, 1999 consolidated financial
statements of the Company and the Subsidiaries heretofore delivered to the Bank
were prepared in accordance with generally accepted accounting principles in
effect on the date such statements were prepared and fairly present the
consolidated financial condition and operations of the Company and the
Subsidiaries at such date and the consolidated results of their operations for
the period then ended.
5.5 Material Adverse Change. Since December 31, 1999, there has been no
change in the business, properties, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries which could reasonably
be expected to have a Material Adverse Effect.
5.6 Litigation and Contingent Obligations. Except as set forth on
Schedule 5.6 hereto, there is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of any of
their officers, threatened against or affecting the Company or any Subsidiary
which might have a Material Adverse Effect. Other than any liability incident to
such litigation, arbitration or proceedings, the Company has no material
contingent obligations not provided for or disclosed in the financial statements
referred to in Section 5.4.
5.7 Regulation U. Margin stock (as defined in Regulation U) constitutes
less than 25% of those assets of the Company and its Subsidiaries which are
subject to any limitation on sale, pledge, or other restriction hereunder.
5.8 Compliance With Laws. The Company and its Subsidiaries have
complied in all material respects with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or
any instrumentality or agency thereof, having jurisdiction over the conduct of
their respective businesses or the ownership of their respective properties.
5.9 Taxes. The Company and its Subsidiaries have filed all United
States federal tax returns and all other material tax returns which are required
to be filed and have paid all taxes due pursuant to said returns or pursuant to
any assessment received by the Company or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided. The United States income tax returns of the Company
and its Subsidiaries have been audited by the Internal Revenue Service through
the fiscal year ended December 31, 1994. No tax liens have been filed and no
claims are being asserted with respect to any such taxes. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of any
taxes or other governmental charges are adequate.
17
5.10 Subsidiaries. Schedule 5.10 hereto contains an accurate list of
all of the Subsidiaries of the Company existing as of the date of this
Agreement, setting forth their respective jurisdictions of incorporation and the
percentage of their respective capital stock owned by the Company or the
Subsidiaries. All of the issued and outstanding shares of capital stock of such
Subsidiaries have been duly authorized and issued and are full paid and
non-assessable.
5.11 ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed 2% of Net Worth. Neither the Company nor any other
member of the Controlled Group has incurred, or is reasonably expected to incur,
any withdrawal liability to Multiemployer Plans in excess of 2% of Net Worth in
the aggregate. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither the Company nor any other member of the Controlled
Group has withdrawn from any Plan or initiated steps to do so, and no steps have
been taken to reorganize or terminate any Plan, except to the extent that said
noncompliance, Reportable Event, withdrawal or termination would not reasonably
be expected to have a Material Adverse Effect.
5.12 Accuracy of Information. All factual information heretofore or
contemporaneously furnished by or on behalf of the Company or any of its
Subsidiaries to the Bank for purposes of or in connection with this Agreement or
any transaction contemplated hereby is, and all other such factual information
hereafter furnished by or on behalf of the Company or any of its Subsidiaries to
the Bank will be, true and accurate in all material respects on the date as of
which such information is dated or communicated and not incomplete by omitting
to state any material fact necessary to make such information (taken as a whole)
not misleading at such time.
5.13 Material Agreements. Neither the Company nor any Subsidiary is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any agreement to which it is a party,
which default could reasonably be expected to have a Material Adverse Effect or
(ii) any agreement or instrument evidencing or governing Indebtedness.
5.14 Ownership of Properties. Except as set forth on Schedule 5.14
hereto, on the date of this Agreement, the Company and its Subsidiaries will
have good title, free of all Liens other than those permitted by Section 6.16,
to all of the property and assets reflected in the financial statements as owned
by them.
5.15 Investment Company Act. Neither the Company nor any Subsidiary
thereof is an "investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
18
5.16 Public Utility Holding Company Act. Neither the Company nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
5.17 Insurance. The certificate signed by the President or Chief
Financial Officer of the Company that attests to the existence and adequacy of,
and summarizes, the property and casualty insurance program carried by the
Company and that has been furnished by the Company to the Bank, is complete and
accurate in all material respects. This summary includes the insurer's or
insurer's name(s), policy number(s), expiration date(s), amount(s) of coverage,
type(s) of coverage, exclusion(s), and deductibles. This summary also includes
similar information, and describes any reserves, relating to any self-insurance
program that is in effect.
6. COVENANTS.
---------
During the term of this Agreement, unless the Bank shall otherwise
consent in writing:
6.1 Financial Reporting. The Company will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles, and furnish to the Bank:
(i) Within 120 days after the close of each of its fiscal
years, an unqualified (as to the scope of the
audit and as a going concern) audit report
certified by independent certified public
accountants reasonably acceptable to the Bank,
prepared in accordance with Agreement Accounting
Principles on a consolidated and consolidating
basis (consolidating statements need not be
certified by such accountants) for itself and the
Subsidiaries, including balance sheets as of the
end of such period, related profit and loss and
reconciliation of surplus statements, and a
statement of cash flows, accompanied by (a) any
management letter prepared by said accountants,
and (b) a certificate of said accountants that, in
the course of their examination necessary for
their certification of the foregoing, they have
obtained no knowledge of any Default or Unmatured
Default as to financial matters, or if, in the
opinion of such accountants, any Default or
Unmatured Default as to financial matters shall
exist, stating the nature and status thereof.
(ii) Within 60 days after the close of the first three
quarterly periods of each of its fiscal years, for
itself and the Subsidiaries, consolidated
unaudited balance sheets as at the close of each
such period and consolidated profit and loss and
reconciliation of surplus statements and a
statement of cash flows for the period from the
beginning of such fiscal year to the end of such
quarter, all certified by an Authorized Financial
Officer,
19
subject to normal year end audit adjustments
and the absence of footnotes.
(iii) Together with the financial statements required
pursuant to clauses (i) and (ii) above, a
compliance certificate in substantially the
form of Exhibit "B" hereto signed by an
Authorized Financial Officer showing the
calculations necessary to determine compliance
with this Agreement and stating that no
Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating
the nature and status thereof.
(iv) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each
Single Employer Plan as of the then most
recent actuarial report of each such Plan,
certified as correct in all material respects
by an enrolled actuary (as defined in Section
7701(a)(35) of the Code).
(v) As soon as possible and in any event within 10 Business
Days after the Company knows that any
Reportable Event has occurred with respect to
any Plan, a statement, signed by an Authorized
Financial Officer, describing said Reportable
Event and the action which the Company
proposes to take with respect thereto.
(vi) As soon as possible and in any event within 10 Business
Days after receipt by the Company, a copy of
(a) any notice or claim to the effect that the
Company or any of its Subsidiaries is or may
be liable to any Person as a result of the
release by the Company, any of its
Subsidiaries, or any other Person of any toxic
or hazardous waste or substance into the
environment, and (b) any notice alleging any
violation of any federal, state or local
environmental, health or safety law or
regulation by the Company to any of its
Subsidiaries, which, in either case, could
reasonably be expected to have a Material
Adverse Effect.
(vii) If requested by the Bank, copies of any regulations,
directives, orders or other material
communications from any government regulatory
authority with jurisdiction over the Company
or a Subsidiary.
(viii) Within 15 Business Days of filing, copies of the
Monthly Letter to Members which Company sends
to its members and copies of any other filings
which are not described in the Monthly Letter
to Members with any regulatory agency which
the Company reasonably believes could have a
material adverse effect on the financial
condition of the Company or its ability to
repay the Loans.
20
(ix) Within 15 Business Days after the Company obtains
knowledge of the institution of, or a written
threat of, any action, suit, proceeding,
governmental investigation or arbitration against
or affecting the Company or any of its
Subsidiaries or any property of the Company or
any of its Subsidiaries not previously disclosed
pursuant to Section 5.6, which action, suit,
proceeding, governmental investigation or
arbitration exposes, or in the case of multiple
actions, suits, proceedings, governmental
investigations or arbitrations arising out of the
same general allegations or circumstances which
expose, in the Company's reasonable judgment, the
Company or any of its Subsidiaries to liability
which could reasonably be expected to result in a
Material Adverse Effect, written notice thereof
to the Bank, together with such other information
as may be reasonably available to enable the Bank
and its counsel to evaluate such matters.
(x) A copy of each regular report, notice or communication
regarding potential or actual defaults (including
any accompanying officers' certificate) delivered
by or on behalf of the Company to any other
holder of its Indebtedness pursuant to the terms
of the agreements governing such Indebtedness,
such delivery to be made at the same time and by
the same means as such notice or other
communication is delivered to such holder.
(xi) Within 15 days after the end of each month, (a) a
Borrowing Base Certificate setting forth a
calculation of the Borrowing Base as of the end
of such month and (b) agings of exchange fees,
quotation fees, service fees, building rentals
and total Accounts Receivable as of the end of
such month.
(xii) Within 30 Business Days after the end of each month, for
itself and the Subsidiaries, consolidated
unaudited balance sheets as at the close of such
month and statements of income and cash flows for
such month, all certified by an Authorized
Financial Officer, subject to normal year end
audit adjustments and the absence of footnotes.
(xiii) Such other information (including non-financial
information) as the Bank may from time to time
reasonably request.
6.2 Use of Proceeds. The Company will use the proceeds of the Loans for
general corporate purposes, including the refinancing of existing indebtedness.
The Company will not, nor will it permit any Subsidiary to, use any of the
proceeds of the Loans to purchase or carry any margin stock (as defined in
Regulation U).
21
6.3 Notice of Default. The Company will, and will cause each Subsidiary
to, give prompt notice in writing to the Bank of the occurrence of any Default
or Unmatured Default.
6.4 Conduct of Business. The Company will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and (except as permitted in the following two sentences) do all things
necessary to remain duly incorporated, validly existing and in good standing as
a domestic corporation in its jurisdiction of incorporation and maintain all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted except where lack of authority would not reasonably be
expected to have a Material Adverse Effect. The Company and its Subsidiaries may
liquidate or dissolve immaterial Subsidiaries. The Company will not change its
corporate status or form of organization (except the Company may reorganize as a
general business corporation in accordance with Section 6.11) without giving at
least 30 days' prior written notice to the Bank of such change and further
provided that the Company will not make any such change if the Bank notifies the
Company within 10 days after receipt of such notice that it deems such change to
have a Material Adverse Effect.
6.5 Taxes. The Company will, and will cause each Subsidiary to, pay
when due all taxes, assessments and governmental charges and levies upon it or
its income, profits or property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside.
6.6 Insurance. The Company will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all its property in such amounts and covering such risks as is consistent with
sound business practice, and the Company will furnish to the Bank upon request
full information as to the insurance carried.
6.7 Compliance with Laws. The Company will, and will cause each
Subsidiary to, comply with all laws (including, without limitation, laws
relating to ERISA and environmental, health and safety laws and regulations),
rules, regulations, orders, writs, judgments, injunctions, decrees or awards to
which it may be subject, except for such noncompliance which could not
reasonably be expected to have a Material Adverse Effect.
6.8 Maintenance of Properties. The Company will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition (ordinary wear and tear
and damage by casualty excepted), and make all necessary and proper repairs,
renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times, except that the Company and
its Subsidiaries shall be permitted to dispose of outmoded, obsolete or
unnecessary property that is no longer used or necessary in the conduct of their
businesses.
6.9 Inspection. The Company will, and will cause each Subsidiary to,
permit the Bank, by its representatives and agents, to inspect any of the
property, corporate books and
22
financial records of the Company and each Subsidiary, to examine and make copies
of the books of accounts and other financial records of the Company and each
Subsidiary, and to discuss the affairs, finances and accounts of the Company and
each Subsidiary with, and to be advised as to the same by, their respective
officers at such reasonable times and intervals as the Bank may designate.
6.10 Indebtedness. The Company will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) The Loans.
(ii) Indebtedness existing on the date hereof and
described in Schedule 6.10 hereto.
(iii) Other Indebtedness and lease financing on terms and
conditions acceptable to the Bank.
(iv) Indebtedness incurred to refinance all or any portion
of the Loans, provided that the proceeds thereof are
used to repay the Loans and the Commitment is
concurrently reduced by the amount of such payment.
(v) Indebtedness incurred in connection with a private
placement of unsecured notes in an aggregate
principal amount not in excess of $75,000,000 issued
pursuant to that certain Master Note Agreement dated
as of March 27, 1997 and such renewals, refinancings
or extensions thereof as may occur from time to time,
provided the final maturity of such notes is
scheduled to occur more than 90 days after the
Revolving Credit Termination Date and the covenants
in the Indenture governing such notes are no more
onerous for the Company than the covenants in this
Agreement.
(vi) Indebtedness in connection with interest rate
protection or hedging agreements so long as such
transactions are entered into at a market rate of
interest to hedge the Company's actual interest rate
risk.
(vii) Loans between the Company and any of its
Subsidiaries.
6.11 Merger. The Company will not, nor will it permit any Subsidiary
to, merge or consolidate with or into any other Person, except that (i) a
Subsidiary may merge with the Company and the Company may merge with any other
Person provided that the Company is the surviving entity and after giving effect
thereto, no Default or Unmatured Default exists, (ii) the Company may reorganize
as a general business corporation organized under the laws of the United States
or any state thereof, provided that the Bank has received at least 30 days'
prior
23
notice of such reorganization and the Bank has not notified the Company within
10 days after receipt of such notice that it has determined that such
reorganization will have a Material Adverse Effect, and (iii) the Company may
merge with the Chicago Board Options Exchange with the prior written consent of
the Bank.
6.12 Sale of Assets. The Company will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property (other than (i)
the sale of outmoded, obsolete or unnecessary Property, (ii) the sale of
inventory in the ordinary course of business, (iii) the transfer of assets to
the Company from any of its Subsidiaries or Affiliates and (iv) any Electronic
Exchange Equity Offering) to any other Person except for leases, sales or other
dispositions of its Property that, together with all other Property of the
Company and its Subsidiaries previously leased, sold or disposed of (other than
property described in the parenthetical clause above) as permitted by this
Section during the twelve-month period ending with the month in which any such
lease, sale or other disposition occurs, do not constitute a Substantial Portion
of the Property of the Company and its Subsidiaries.
6.13 Sale of Accounts. The Company will not, nor will it permit any
Subsidiary to, sell or otherwise dispose of any notes receivable or accounts
receivable, with or without recourse, provided that this Section 6.13 shall not
prohibit the Company or any of its Subsidiaries from compromising or settling a
note receivable or account receivable in the ordinary course of business on
commercially reasonably terms.
6.14 Sale and Leaseback. The Company will not, nor will it permit any
Subsidiary to, sell or transfer any of its Property which was acquired with the
proceeds of Loans under this Agreement in order to concurrently or subsequently
lease as lessee such or similar Property.
6.15 Investments and Acquisitions. The Company will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including,
without limitation, loans and advances to, and other investments in,
Subsidiaries), or commitments therefor, or create any Subsidiary or become or
remain a partner in any partnership or joint venture, or make any Acquisition of
any Person, except:
(i) Obligations with maturities (or remaining term to
maturity) of less than three years of, or
fully guaranteed by, the United States of
America.
(ii) Commercial paper rated A-1 or better by Standard and
Poor's Corporation or P-1 or better by Xxxxx'x
Investors Service, Inc.
(iii) Demand deposit accounts maintained in the ordinary
course of business with commercial banks
(whether domestic or foreign) having capital
and surplus in excess of $500,000,000,
provided that the Company may maintain demand
deposits of up to $1,000,000 in the aggregate
with commercial banks not meeting such capital
and surplus criteria.
24
(iv) Certificates of deposit with a rating of A-2 or better by
Standard and Poor's Corporation or P-2 or
better by Xxxxx'x Investors Services, Inc.
and issued by and time deposits with
commercial banks (whether domestic or
foreign) having capital and surplus in
excess of $500,000,000.
(v) Existing Investments in Subsidiaries and other Investments
in existence on the date hereof and
described in Schedule 6.15 hereto.
(vi) Creation of additional Subsidiaries provided that the
aggregate amount invested therein, together
with the aggregate amount of Investments
made pursuant to clause 6.15(vii), does not
exceed $35,000,000.
(vii) Other Investments and Acquisitions made from time to
time provided that the amount of all
Investments made pursuant to clause
6.15(vi) and this clause 6.15(vii) shall
not exceed $35,000,000 in the aggregate.
(viii) Investments in connection with interest rate protection
or hedging agreements, provided such
transactions are entered into at market
rates of interest and that any such
investments consisting of option agreements
are executed with counterparties who meet
the criteria set forth in 6.15(iv) hereof.
(ix) Bankruptcy or reorganization securities issued to the
Company or any of its Subsidiaries in
connection with a bankruptcy or
reorganization in which the Company or a
Subsidiary is a creditor.
6.16 Liens. The Company will not, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien on the property of the Company or any
of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or
levies on its property if the same shall
not at the time be delinquent or thereafter
can be paid without penalty, or are being
contested in good faith and by appropriate
proceedings and for which adequate reserves
in accordance with Agreement Accounting
Principles shall have been set aside on its
books.
(ii) Liens imposed by law, such as carriers', warehousemen's
and mechanics' liens and other similar
liens arising in the ordinary course of
business which secure payment of
obligations not more than 60 days past due
or which are being contested in good faith
by appropriate proceedings and for which
adequate reserves shall have been set aside
on its books.
25
(iii) Liens arising out of pledges or deposits in the ordinary
course of business in connection with workers'
compensation, unemployment insurance, old age
pensions, or other social security or retirement
benefits, or similar legislation or to secure the
performance of tenders, leases, government
contracts, performance and return of money bonds
and other similar obligations incurred in the
ordinary course of business and not incurred with
respect to obligations for borrowed money or the
equivalent.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as
are of a nature generally existing with respect
to properties of a similar character and which do
not in any material way affect the marketability
of the same or interfere with the use thereof in
the business of the Company or the Subsidiaries.
(v) Liens existing on the date hereof and described in
Schedule 6.16 hereto.
(vi) Liens incurred in connection with purchase money security
interests, capital leases and conditional sales
with respect to equipment acquired by the Company
or a Subsidiary in the ordinary course of
business, provided the Lien attaches only to the
equipment being acquired and the aggregate
principal amount of Indebtedness secured thereby
is permitted by Section 6.10.
(vii) Liens created by precautionary filings under the Uniform
Commercial Code by lessors or similar financing
parties.
(viii) Liens securing obligations not in excess of $1,000,000
arising as a result of a judgment or order for
the payment of money that does not constitute a
Default under Section 7.9 hereof.
(ix) Liens arising in connection with other Indebtedness,
lease financings and refinancing of the Loans as
permitted under Section 6.10 hereof.
(x) Liens in favor of the Bank.
6.17 Dividends. The Company will not, nor will it permit any Subsidiary
to, declare or pay any dividends on its capital stock or other equity interests
(other than dividends payable in its own capital stock) or redeem, repurchase or
otherwise acquire or retire any of its capital stock or other equity interests
at any time outstanding, except that any Subsidiary may declare and pay
dividends to the Company or to a wholly-owned Subsidiary, provided, however, if
the Company reorganizes as a general business corporation, the Bank agrees to
enter into discussions with the Company to attempt to develop and agree to a
test to permit the payment of certain dividends.
26
6.18 EBITDA Ratio. The Company will maintain, at the end of each fiscal
quarter ending during the time periods set forth below, an EBITDA Ratio at least
equal to the ratio set forth below opposite the applicable time periods:
Fiscal Quarters
Ended During EBITDA Ratio
------------ ------------
From the Closing Date to and including
September 30, 2000 2.5 to 1.0
December 31, 2000 and thereafter 4.0 to 1.0
6.19 Net Worth. The Company will maintain at all times a Net Worth of
at least $170,000,000, such amount to be increased (a) on a cumulative basis, on
the last day of each fiscal quarter ending after the date hereof by an amount
equal to 50% of Consolidated Net Income, if positive, during the fiscal quarter
ending on such date, and (b) by 100% of any increase in Net Worth resulting from
any Electronic Exchange Equity Offering.
6.20 Capital Expenditures. The Company will not permit the aggregate
amount of all Capital Expenditures made by the Company and its Subsidiaries
during the term of this Agreement to exceed $5,000,000.
7. DEFAULTS.
--------
The occurrence of any one or more of the following events shall
constitute a Default:
7.1 Any representation or warranty made or deemed made by or on behalf
of the Company or any Subsidiary to the Bank under or in connection with this
Agreement, any Loan, or any certificate or information delivered in connection
with this Agreement or any other Loan Document shall be materially false on the
date as of which made.
7.2 Nonpayment of principal of the Note when due, or nonpayment of
interest upon the Note or of any commitment fee or other obligation under this
Agreement or any other Loan Document within five days after the same becomes
due.
7.3 The breach by the Company of any of the terms or provisions of
Section 6.2, 6.3, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, or 6.17.
7.4 The breach by the Company (other than a breach which constitutes a
Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of any
Loan Document which is not remedied within thirty days after written notice from
the Bank.
7.5 Failure of the Company or any Subsidiary to pay any indebtedness
for borrowed money (other than the Loans) in excess of $5,000,000 when due; or
the default by the Company
27
or any Subsidiary in the performance of any term, provision or condition
contained in any agreement under which any such indebtedness was created or is
governed, or any other event shall occur or condition exists, the effect of
which is to cause, or to permit the holder or holders of such indebtedness to
cause, such indebtedness to become due prior to its stated maturity; or any such
indebtedness of the Company or any Subsidiary shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled payment)
prior to the stated maturity thereof; or the Company or any Subsidiary shall not
pay, or shall admit in writing its inability to pay, its debts generally as they
become due.
7.6 The Company or any of its Material Subsidiaries shall (i) have an
order for relief entered with respect to it under the federal bankruptcy laws as
now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment
of a receiver, custodian, trustee, examiner, liquidator or similar official for
it or any Substantial Portion of its property, (iv) institute any proceeding
seeking an order for relief under the federal bankruptcy laws as now or
hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it, (v) take any corporate action to authorize or effect any of
the foregoing actions set forth in this Section 7.6 or (vi) fail to contest in
good faith any appointment or proceeding described in Section 7.7.
7.7 Without the application, approval or consent of the Company or any
of its Material Subsidiaries, a receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Company or any Subsidiary or any
Substantial Portion of its property, or a proceeding described in Section
7.6(iv) shall be instituted against the Company or any Subsidiary and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of 45 consecutive days.
7.8 Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of (each a "Condemnation"),
all or any portion of the property of the Company and its Subsidiaries which,
when taken together with all other property of the Company and its Subsidiaries
so condemned, seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such Condemnation occurs,
constitutes a Substantial Portion.
7.9 The Company or any of its Subsidiaries shall fail to pay, bond or
otherwise discharge any judgment or order for the payment of money (to the
extent not covered by insurance by an insurer that has not disclaimed coverage)
in excess of $5,000,000 for a period of more than 30 days, during which the
execution thereof is not effectively stayed, released or vacated.
28
7.10 The Commodity Futures Trading Commission ("CFTC") or any other
government agency with authority over the Company or any Subsidiary shall issue
any order, regulation or directive which limits or prohibits the Company or its
Subsidiaries from engaging in their business as now conducted, taken as a whole
(including without limitation, the stoppage of trading), or the CFTC shall take
any other action with respect to the Company or any Subsidiary which the Bank
determines in good faith could reasonably be expected to have a Material Adverse
Effect and such order, regulation, directive or action continues for more than
30 days, unless stayed on appeal.
7.11 The Unfunded Liabilities of all Single Employer Plans shall exceed
in the aggregate 2% of the Company's Net Worth or any Reportable Event shall
occur in connection with any Plan.
7.12 The Company or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan in an amount which, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
the Company or any other member of the Controlled Group as withdrawal liability
(determined as of the date of such notification), exceeds 2% of the Company's
Net Worth.
7.13 The Company or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of Title IV
of ERISA, if as a result of such reorganization or termination the aggregate
annual contributions of the Company and the other members of the Controlled
Group (taken as a whole) to all Multiemployer Plans which are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the respective plan years of
each such Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount that would reasonably be
expected to have a Material Adverse Effect.
7.14 The Company or any of its Subsidiaries shall be the subject of any
proceeding or investigation pertaining to the release by the Company or any of
its Subsidiaries, or any other Person of any toxic or hazardous waste or
substance into the environment, or any violation of any federal, state or local
environmental, health or safety law or regulation, which, in either case, would
reasonably be expected to have a Material Adverse Effect.
7.15 A Change in Control shall occur.
8. ACCELERATION AND REMEDIES.
-------------------------
8.1 Acceleration. If any Default described in Section 7.6 or 7.7 occurs
with respect to the Company, the obligations of the Bank to make Loans hereunder
shall automatically terminate
29
and the Obligations shall immediately become due and payable without any
election or action on the part of the Bank. If any other Default occurs, the
Bank may terminate or suspend the obligations of the Bank to make Loans
hereunder, or declare the Obligations to be due and payable, or both, whereupon
the Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Company hereby expressly
waives.
8.2 Preservation of Rights. No delay or omission of the Bank to
exercise any right under this Agreement or any other Loan Document shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan notwithstanding the existence of a Default or
the inability of the Company to satisfy the conditions precedent to such Loan
shall not constitute any waiver or acquiescence. Any single or partial exercise
of any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of this Agreement or the other Loan Documents
whatsoever shall be valid unless in writing signed by the Bank and then only to
the extent in such writing specifically set forth. All remedies contained in
this Agreement and the other Loan Documents or by law afforded shall be
cumulative and all shall be available to the Bank until the Obligations have
been paid in full.
9. GENERAL PROVISIONS.
------------------
9.1 Survival of Representations. All representations and warranties of
the Company contained in this Agreement shall survive delivery of the Loan
Documents and the making of the Loans herein contemplated.
9.2 Taxes. Any taxes (excluding income taxes) or other similar
assessments or charges payable or ruled payable by any governmental authority in
respect of this Agreement and the other Loan Documents shall be paid by the
Company, together with interest and penalties, if any.
9.3 Expenses; Indemnification. The Company shall reimburse the Bank for
any costs, internal charges and out-of-pocket expenses (including attorneys'
fees and time charges of attorneys for the Bank, which attorneys may be
employees of the Bank) paid or incurred by the Bank in connection with the
preparation, review, execution, delivery, amendment, modification,
administration, collection and enforcement of this Agreement and the other Loan
Documents. The Company further agrees to indemnify the Bank, its directors,
officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor whether or not the Bank is a party
thereto) which any of them may pay or incur arising out of or relating to this
Agreement, the other Loan Documents, the transactions contemplated hereby and
thereby or the direct or indirect application or proposed application of the
proceeds of any Loan hereunder, provided, however, that neither the Bank, nor
any of its directors, officers or employees shall be indemnified against
30
their own gross negligence or willful misconduct. The obligations of the Company
under this Section shall survive the termination of this Agreement.
9.4 CHOICE OF LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
9.5 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Company and the
Bank and their respective successors and assigns, except that the Company shall
not have the right to assign its rights or obligations under the Loan Documents.
The Bank may, in the ordinary course of its commercial banking business and in
accordance with applicable law, at any time sell to one or more banks or other
entities participating interests in any Loan, the Note or the Commitment,
provided that the Bank shall retain the sole right to approve, without the
consent of any participant, any amendment, modification or waiver of any
provision of this Agreement or the other Loan Documents other than any
amendment, modification or waiver with respect to the Loan or Commitment which
forgives principal, interest of fees or reduces the interest rate or fees
payable with respect to said Loan or Commitment or postpones any date fixed for
any regularly-scheduled payment of principal of, or interest or fees on, any
Loan or the Commitment. The Company agrees that each holder of such a
participating interest shall be deemed to have the right of setoff provided in
Section 9.11 in respect of its participating interest in amounts owing under the
Loan Documents to the same extent as if the amount of its participating interest
were owing directly to it as the Bank under the Loan Documents; provided that to
the extent such participant does not exercise such right of setoff the Bank
shall retain the right of setoff provided in Section 9.11 with respect to the
amount of participating interests sold to such participant. The Bank may, with
the consent of the Company, which consent shall not be unreasonably withheld,
assign to one or more banks or other entities all or any part of its rights and
obligations under this Agreement or the other Loan Documents, provided any such
assignment shall be in a minimum amount of $5,000,000 (and the Company shall
release the Bank for the amount so assigned). Notwithstanding the preceding
sentence, the Bank may at any time, without the consent of the Company, assign
all or any portion of its rights under this Agreement and the Note to a Federal
Reserve Bank; provided, however, that no such assignment to a Federal Reserve
Bank shall release the Bank from its obligations hereunder.
9.6 Dissemination of Information. The Company authorizes the Bank to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in the Bank's possession
concerning the creditworthiness of the Company and its Subsidiaries.
9.7 Giving Notice. Except as otherwise permitted by Section 2.6 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Documents shall be in
writing or by telex or by facsimile and
31
addressed or delivered to such party at its address set forth below its
signature hereto or at such other address as may be designated by such party in
a notice to the other parties. Any notice, if mailed and properly addressed with
postage prepaid, shall be deemed given when received; any notice, if transmitted
by telex or facsimile, shall be deemed given when transmitted (answerback
confirmed in the case of telexes).
9.8 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
9.9 Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.10 Nonliability of Bank. The relationship between the Company and the
Bank shall be solely that of borrower and lender. The Bank shall not have any
fiduciary responsibilities to the Company. The Bank does not undertake any
responsibility to the Company to review or inform the Company of any matter in
connection with any phase of the Company's business or operations. The Company
agrees that the Bank shall not have liability to the Company (whether sounding
in tort, contract or otherwise) for losses suffered by the Company in connection
with, arising out of, or in any way related to, the transactions contemplated
and the relationship established by the Loan Documents, or any act, omission or
event occurring in connection therewith, unless it is determined by a court of
competent jurisdiction in a final and non-appealable order that such losses
resulted from the gross negligence or willful misconduct of the Bank. The Bank
shall not have any liability with respect to, and the Company hereby waives,
releases and agrees not to xxx for, any special, indirect or consequential
damages suffered by the Company in connection with, arising out of, or in any
way related to the Loan Documents or the transactions contemplated thereby.
9.11 Setoff. In addition to, and without limitation of, any rights of
the Bank under applicable law, if the Company becomes insolvent, however
evidenced, or any Default occurs and is continuing, any and all deposits
(including all account balances, whether provisional or final and whether or not
collected or available) and any other Indebtedness at any time held or owing by
the Bank to or for the credit or account of the Company may be offset and
applied toward the payment of the Obligations then owing, whether or not the
Obligations, or any part thereof, shall then be due.
9.12 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by the
Company and the Bank.
32
9.13 CONSENT TO JURISDICTION. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENTS AND THE COMPANY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
BANK TO BRING PROCEEDINGS AGAINST THE COMPANY IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE COMPANY AGAINST THE BANK OR ANY
AFFILIATE OF THE BANK INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT
ONLY IN A COURT IN CHICAGO, ILLINOIS.
9.14 WAIVER OF JURY TRIAL. THE COMPANY AND THE BANK HEREBY WAIVE TRIAL
BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
33
IN WITNESS WHEREOF, the Company and the Bank have executed this
Agreement as of the date first above written.
BOARD OF TRADE OF THE CITY OF
CHICAGO, INC.
By: /s/ Xxxx X. Xxxxxxx
Title: SVP/CFO
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxx
BANK ONE, NA (Main Office Chicago)
By: /s/ Xxxxxxx Xxxxxxx
Title: Vice President
1 Bank Xxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxx
Schedule 5.6
------------
Litigation
----------
Xxxxxx v. The Board of Trade of The City of Chicago, Xx. 00 X 0000, X.X. Xxx.,
Xxxxxxx Division
The one remaining count in this case is a Xxxxxxx Act section one
antitrust claim brought on behalf of soybean farmers alleging a conspiracy to
fix the price of cash soybeans. The claim is based on an emergency order
promulgated by the Company in the July 1989 soybean futures contract. All of the
other claims brought in plaintiffs' original complaint have been dismissed. The
court certified the case as a class action, but the Company's motion for
reconsideration of this decision is still pending. Discovery is complete. The
court recently denied the Company's motion for summary judgment on the remaining
antitrust count, but has agreed to reconsider the motion upon resolution of the
Company's recently filed motion to exclude the testimony of plaintiffs' expert
witness.
CBOT v. CBOE, Xx. 00XX00000, Xxxxxxx Xxxxx xx Xxxx Xxxxxx, Chancery Division
On June 30, 2000, the Company filed a complaint against the CBOE
seeking a declaration that Step One of the Company's restructuring plan, which
will result in the Company becoming a Delaware not-for-profit company, does not
extinguish the Exercise Right granted in Article Fifth (b) of the CBOE's
Certificate of Incorporation and delineated in a 1992 contract between the
Company and the CBOE. The Company also sought an injunction prohibiting the CBOE
from taking any action to extinguish the Exercise Right based on its move to
Delaware pursuant to Step One. On July 14, 2000, the CBOE moved to dismiss the
lawsuit, arguing that it was preempted by the Securities and Exchange Act and
that it was not ripe for decision. The Company's response was filed on July 21;
CBOE's reply was filed on July 25, 2000. On August 3, 2000, the court heard oral
argument, and extracted a judicial admission from the CBOE that it would not
take any action to extinguish the Exercise Right, now or in the future, based
solely on Step One of the Company's restructuring. Based on that binding
admission, Judge Xxxxxxx Xxxxxxxx dismissed the lawsuit on the grounds that
there was no justiciable controversy. In dicta, Judge Schiller stated that he
was not persuaded by CBOE's argument that the lawsuit was preempted, and
indicated his belief that an action for breach of the 1992 Agreement was
properly resolved by the Illinois state court.
Schedule 5.10
-------------
Subsidiaries
------------
--------------------------------------------------------------------------------
Subsidiary Percent Ownership Jurisdiction of Organization
---------- ----------------- ----------------------------
------------------------------ ------------------- -----------------------------
C-B-T Corporation 100% Delaware
------------------------------ ------------------- -----------------------------
MidAmerica Commodity Exchange 100% Illinois
--------------------------------------------------------------------------------
Schedule 5.14
-------------
Properties
----------
Not applicable.
Schedule 6.10
-------------
Existing Indebtedness
---------------------
Indebtedness related to the lien described on Schedule 6.16.
Schedule 6.15
-------------
Existing Investments
--------------------
--------------------------------------------------------------------------------
Investment In Percent Ownership
------------- -----------------
-------------------------------------------- -----------------------------------
C-B-T Corporation 100%
-------------------------------------------- -----------------------------------
MidAmerica Commodity Exchange 100%
-------------------------------------------- -----------------------------------
CBOT/Eurex Alliance, L.L.C. 50% owned by Ceres Trading Limited
Partnership
-------------------------------------------- -----------------------------------
Ceres Trading Limited Partnership 10% General Partner
--------------------------------------------------------------------------------
Schedule 6.16
-------------
Existing Liens
--------------
Lien in favor of Newcourt Receivables Corporation relating to certain computer
equipment of the Company.
EXHIBIT "A"
NOTE
$10,000,000 August 11, 2000
Board of Trade of the City of Chicago, Inc., a Delaware not-for-profit
corporation (the "Company"), promises to pay to the order of Bank One, NA (the
"Bank") the lesser of the principal sum of Ten Million Dollars or the aggregate
unpaid principal amount of all Loans made by the Bank to the Company pursuant to
Section 2.1 of the Credit Agreement (the "Agreement") hereinafter referred to,
in immediately available funds at the main office of the Bank in Chicago,
Illinois, together with interest on the unpaid principal amount hereof at the
rates and on the dates set forth in the Agreement. The Company shall pay the
Loans in full on the Revolving Credit Termination Date (as defined in the
Agreement)
The Bank shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is the Note issued pursuant to, and is entitled to the
benefits of, the Credit Agreement dated as of August 11, 2000, between the
Company and the Bank, to which Agreement, as it may be amended from time to
time, reference is hereby made for a statement of the terms and conditions under
which this Note may be prepaid or its maturity date accelerated. Capitalized
terms used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
BOARD OF TRADE OF THE CITY OF
CHICAGO, INC.
By:
--------------------------------------
Title:
-----------------------------------
Exh. A-1
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF BOARD OF TRADE OF CITY OF CHICAGO, INC.
DATED ___________________, 2000
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
--------------------------------------------------------------------------------
Exh. A-2
EXHIBIT B
FORM OF COMPLIANCE CERTIFICATE
To: Bank One, NA
0 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
This Compliance Certificate is furnished pursuant to the Credit
Agreement dated as of August 11, 2000 (as amended, modified, renewed or extended
from time to time, the "Agreement") between the Borrower and Bank One, NA.
Unless otherwise defined herein, capitalized terms used in this Compliance
Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _____________ of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review
of the transactions and conditions of the Borrower and its
Subsidiaries during the accounting period covered by the
attached financial statements;
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or
event which constitutes a Default or Unmatured Default during
or at the end of the accounting period covered by the attached
financial statements or as of the date of this Compliance
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth the financial data and
computations evidencing the Borrower's compliance with certain
covenants of the Agreement, all of which data and computations
are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
---------------------------------------------------------------
---------------------------------------------------------------
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this Compliance
Certificate in support hereof, are made and delivered this ___ day of _________,
20__.
BOARD OF TRADE OF THE CITY OF
CHICAGO, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule of Compliance with the provisions of Sections 6.18
and 6.19 of the Agreement for the Quarter Ended ________ , 20__
--------------------------------------------------------------------------------
I. Minimum EBITDA Ratio (ss.6.18)
--------------------------------------------------- ------------- --------------
1. Consolidated Net Income $________
--------------------------------------------------- ------------- --------------
2. Interest Expense $________
--------------------------------------------------- ------------- --------------
3. Income tax expense $________
--------------------------------------------------- ------------- --------------
4. Depreciation and amortization expense $________
--------------------------------------------------- ------------- --------------
5. EBITDA (I1+I2+I3+I4) $________
--------------------------------------------------- ------------- --------------
6. EBITDA Ratio (I5/I2) ___: 1.0
--------------------------------------------------- ------------- --------------
7. Minimum EBITDA Ratio ___: 1.0
--------------------------------------------------- ------------- --------------
--------------------------------------------------- ------------- --------------
II. Minimum Net Worth (ss.6.19)
--------------------------------------------------- ------------- --------------
1. Beginning/Previous required Net Worth $________
--------------------------------------------------- ------------- --------------
2. 50% of positive Consolidated Net Income $________
during the current fiscal quarter
--------------------------------------------------- ------------- --------------
3. 100% of any increase in Net Worth $________
resulting from any Electronic Exchange
Equity Offering
--------------------------------------------------- ------------- --------------
4. Net Worth (II1+II2+II3) $________
--------------------------------------------------- ------------- --------------
5. Minimum Net Worth $170,000,000
--------------------------------------------------------------------------------
EXHIBIT C
FORM OF BORROWING BASE CERTIFICATE
Bank One, NA
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Credit Agreement dated as of August 11, 2000 (as amended or
otherwise modified from time to time, the "Credit Agreement")
between Board of Trade of the City of Chicago, Inc. and Bank
One, NA
Ladies/Gentlemen:
Terms to which meanings are ascribed in the Credit Agreement are used
in this Borrowing Base Certificate with such meanings.
The Company hereby certifies that as of _____________, the amount of
the Borrowing Base was $___________________. The related computations are set
forth on Schedule 1 hereto.
IN WITNESS WHEREOF, the Company has caused this Borrowing Base
Certificate to be executed and delivered by its ______________________* on the
____ day of _______________, 20___.
BOARD OF TRADE OF THE CITY OF
CHICAGO, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
*To be signed by an Authorized Financial Officer.
SCHEDULE I
----------
TO
BORROWING BASE CERTIFICATE
ELIGIBLE ACCOUNTS RECEIVABLE
as of ______________, 20___
---------------------------------------------------------------------------------------------------------------------------
Exchange Quotation Service Membership
Fees Fees Fees Fees/Dues
Accounts Accounts Accounts Accounts
Receivable Receivable Receivable Receivable Total
------------------------------- ------------------ ------------------ ----------------- ------------------ ----------------
Gross
------------------------------- ------------------ ------------------ ----------------- ------------------ ----------------
Ineligible (from page 2)
------------------------------- ------------------ ------------------ ----------------- ------------------ ----------------
Eligible
------------------------------- ------------------ ------------------ ----------------- ------------------ ----------------
Advance Rate 80% 80% 80% 80% 80%
------------------------------- ------------------ ------------------ ----------------- ------------------ ----------------
Borrowing Base Amount
$ $ $ $ $
---------------------------------------------------------------------------------------------------------------------------
INELIGIBLE ACCOUNTS RECEIVABLE
as of __________________, 20____
---------------------------------------------------------------------------------------------------------------------------
Exchange Quotation Service Membership
Fees Fees Fees Fees/Dues
Accounts Accounts Accounts Accounts
Receivable Receivable Receivable Receivable Total
-------------------------------- ----------------- ------------------ ---------------- ----------------- ------------------
+90 Past Invoice Date or +60
past due date N/A
-------------------------------- ----------------- ------------------ ---------------- ----------------- ------------------
invoice issued +30 past end of
billing period or +30 past N/A N/A N/A
invoice date
-------------------------------- ----------------- ------------------ ---------------- ----------------- ------------------
Cross-Age (25%)
-------------------------------- ----------------- ------------------ ---------------- ----------------- ------------------
Credits-in-Prior
-------------------------------- ----------------- ------------------ ---------------- ----------------- ------------------
Non-U.S. Account Debtor*
-------------------------------- ----------------- ------------------ ---------------- ----------------- ------------------
Government Accounts
-------------------------------- ----------------- ------------------ ---------------- ----------------- ------------------
Affiliated Account Debtor
-------------------------------- ----------------- ------------------ ---------------- ----------------- ------------------
---------------------
*1 Not backed by LC or otherwise approved.
Contras
-------------------------------- ----------------- ------------------ ---------------- ----------------- ------------------
Rebates
-------------------------------- ----------------- ------------------ ---------------- ----------------- ------------------
Membership Discount Reserve
-------------------------------- ----------------- ------------------ ---------------- ----------------- ------------------
Other Ineligible**
-------------------------------- ----------------- ------------------ ---------------- ----------------- ------------------
Total Ineligibles
---------------------------------------------------------------------------------------------------------------------------
---------------------
**1 Account Debtor insolvent or in bankruptcy, chattel paper or
instrument not delivered, subject to other Lien, portion from
one Account Debtor constituting more than 25% of all Accounts
Receivable, etc.
EXHIBIT D
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") dated as of August 11, 2000,
is between the Board of Trade of the City of Chicago, Inc. (the "Company") and
BANK ONE, NA (the "Bank").
W I T N E S S E T H:
-------------------
WHEREAS, the Company has entered into a Credit Agreement dated as of
August 11, 2000 (as amended or otherwise modified from time to time, the "Credit
Agreement") with the Bank;
WHEREAS, the obligations of the Company under the Credit Agreement are
to be secured pursuant to this Agreement;
NOW, THEREFORE, for and in consideration of any loan, advance or other
financial accommodation heretofore or hereafter made to the Company under or in
connection with the Credit Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. When used herein, (a) the terms Chattel Paper and
Instrument have the respective meanings assigned thereto in the UCC (as defined
below); (b) capitalized terms which are not otherwise defined have the
respective meanings assigned thereto in the Credit Agreement; and (c) the
following terms have the following meanings (such definitions to be applicable
to both the singular and plural forms of such terms):
Account means all "accounts" as defined in the UCC and, in any event,
includes all exchange fees, quotation fees, rental payments, membership fees,
membership dues and service fees.
Account Debtor means any Person who is obligated under, or in respect
of, any Account.
Assignee Deposit Account - see Section 4.
Collateral means all property and rights of the Company in which a
security interest is granted hereunder.
Liabilities means all obligations (monetary or otherwise) of the
Company under the Credit Agreement, any Note or any document or instrument
executed in connection therewith, in
each case howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become due.
UCC means the Uniform Commercial Code as in effect from time to time in
the State of Illinois.
2. Grant of Security Interest. As security for the payment of all
Liabilities, the Company hereby grants to the Bank a continuing security
interest in the following, whether now or hereafter existing or acquired: all of
the Company's Accounts and all security therefor and guaranties thereof and all
Chattel Paper and all Instruments evidencing or relating to any Accounts,
together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all proceeds
of, rights arising out of and returns of and from any of the foregoing.
3. Warranties. The Company warrants that: (i) no financing statement
(other than any which may have been filed on behalf of the Bank) covering any of
the Collateral is on file in any public office; (ii) the Company is and will be
the lawful owner of all Collateral, free of all liens and claims whatsoever,
other than the security interest hereunder and Liens permitted under clause
6.16(i) of the Credit Agreement ("Permitted Liens"), with full power and
authority to execute this Agreement and perform the Company's obligations
hereunder, and to subject the Collateral to the security interest hereunder;
(iii) all information with respect to Collateral and Account Debtors set forth
in any schedule, certificate or other writing at any time heretofore or
hereafter furnished by the Company to the Bank is and will be true and correct
in all material respects as of the date furnished; (iv) the Company's true legal
name as registered in the jurisdiction in which the Company is incorporated, the
state of its incorporation, its organizational identification number as
designated by the state of its incorporation, and its chief executive office and
principal place of business are as set forth on Schedule I hereto (and the
Company has not maintained its chief executive office and principal place of
business at any other location at any time after January 1, 2000); (v) except as
set forth on Schedule II hereto, the Company is not now known and during the
five years preceding the date hereof has not previously been known by any trade
name; and (vi) except as set forth on Schedule II hereto, during the five years
preceding the date hereof the Company has not been known by any legal name
different from the one set forth on the signature page of this Agreement nor has
the Company been the subject of any merger or other corporate reorganization.
4. Collections, etc. Until such time during the existence of a Default
as the Bank shall notify the Company of the revocation of such power and
authority, the Company will, at its own expense, endeavor to collect, as and
when due, all amounts due under the Accounts, and
-2-
may grant, in the ordinary course of business, to any party obligated on any of
the Accounts, any refund or allowance to such party consistent with past
practice. The Bank, however, may, at any time that a Default exists, whether
before or after any revocation of such power and authority or the maturity of
any of the Liabilities, notify any parties obligated on the Accounts to make
payment to the Bank of any amounts due or to become due thereunder and enforce
collection of the Accounts by suit or otherwise and surrender, release or
exchange all or any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any indebtedness
thereunder or evidenced thereby. Upon the request of the Bank during the
existence of a Default, the Company will, at its own expense, notify any or all
parties obligated on the Accounts to make payment to the Bank of any amounts due
or to become due thereunder.
Upon request by the Bank during the existence of a Default, the Company
will forthwith, upon receipt, transmit and deliver to the Bank, in the form
received, all cash, checks, drafts and other instruments or writings for the
payment of money (properly endorsed, where required, so that such items may be
collected by the Bank) which may be received by the Company at any time in full
or partial payment or otherwise as proceeds of any of the Collateral. Except as
the Bank may otherwise consent in writing, any such items which may be so
received by the Company will not be commingled with any other of its funds or
property, but will be held separate and apart from its own funds or property and
upon express trust for the Bank until delivery is made to the Bank. The Company
will comply with the terms and conditions of any consent given by the Bank
pursuant to the foregoing sentence.
During the existence of a Default, all items or amounts which are
delivered by the Company to the Bank on account of partial or full payment or
otherwise as proceeds of any of the Collateral shall be deposited to the credit
of a deposit account (an "Assignee Deposit Account") of the Company with the
Bank over which the Bank has sole dominion and control, as security for payment
of the Liabilities. The Company shall not have any right to withdraw any funds
deposited in the Assignee Deposit Account. The Bank may, from time to time, in
its discretion, and shall upon request of the Company made not more than once in
any week, apply all or any of the then balance, representing collected funds, in
the Assignee Deposit Account toward payment of the Liabilities, whether or not
then due, in such order of application as the Bank may determine, and the Bank
may, from time to time, in its discretion, release all or any of such balance to
the Company.
The Bank (or any designee of the Bank) is authorized to endorse, in the
name of the Company, any item, howsoever received by the Bank, representing any
payment on or other proceeds of any of the Collateral.
-3-
5. Certificates, Schedules and Reports. The Company will from time to
time, as the Bank may reasonably request, deliver to the Bank such schedules,
certificates and reports respecting all or any of the Collateral at the time
subject to the security interest hereunder, and the items or amounts received by
the Company in full or partial payment of any of the Collateral, as the Bank may
reasonably request. Any such schedule, certificate or report shall be executed
by a duly authorized officer of the Company and shall be in such form and detail
as the Bank may reasonably specify.
6. Agreements of the Company. The Company (a) will, upon request of the
Bank, execute such financing statements and other documents (and pay the cost of
filing or recording the same in all public offices reasonably deemed appropriate
by the Bank) and do such other acts and things, all as the Bank may from time to
time reasonably request, to establish and maintain a valid security interest in
the Collateral (free of all other liens, claims and rights of third parties
whatsoever other than Permitted Liens) to secure the payment of the Liabilities;
(b) authorizes the Bank to file such financing statements and other documents
without its signature (to the extent allowed by applicable law); (c) shall not
change its state of incorporation or its name, identity or corporate structure
such that any financing statement filed to perfect the Bank's interests under
this Agreement would become seriously misleading, unless the Company shall have
given the Bank not less than 30 days' prior notice of such change (provided that
this Section 6(c) shall not be deemed to authorize any change or transaction
prohibited under the Credit Agreement); (d) will keep its records concerning the
Collateral in such a manner as will enable the Bank or its designees to
determine at any time the status of the Collateral; (e) will furnish the Bank
such information concerning the Company, the Collateral and the Account Debtors
as the Bank may from time to time reasonably request; (f) will permit the Bank
and its designees, from time to time, on reasonable notice and at reasonable
times and intervals during normal business hours (or at any time without notice
during the existence of a Default), to inspect, audit and make copies of and
extracts from all records and other papers in the possession of the Company
pertaining to the Collateral and the Account Debtors, and will, upon request of
the Bank during the existence of a Default, deliver to the Bank all of such
records and papers; (g) will, upon request of the Bank, stamp on its records
concerning the Collateral, and add on all Chattel Paper constituting a portion
of the Collateral, a notation, in form satisfactory to the Bank, of the security
interest of the Bank hereunder; (h) will not sell, lease, assign or create or
permit to exist any Lien (other than Permitted Liens) on any Collateral; (i)
will take all steps reasonably necessary to protect, preserve and maintain all
of its rights in the Collateral; and (j) will reimburse the Bank for all
expenses, including reasonable attorney's fees and charges (including time
charges of attorneys who are employees of the Bank), incurred by the Bank in
seeking to collect or enforce any rights in respect of the Collateral.
-4-
The Bank shall have no obligation or liability regarding the Collateral
or any part thereof by reason of, or arising out of, this Agreement.
7. Default. Whenever a Default shall be existing, the Bank may exercise
from time to time any and all rights and remedies available to it under the UCC,
any other applicable law and hereunder. Notice of the intended disposition of
any Collateral may be given by first-class mail, hand-delivery (through a
delivery service or otherwise), facsimile or e-mail, and shall be deemed to have
been "sent" three business days after deposit in the U.S. Mails with adequate
postage properly affixed, upon delivery to an express delivery service or upon
electronic submission through telephonic or Internet services, as applicable.
The Company agrees and acknowledges that (i) with respect to collateral that is
(A) perishable or threatens to decline speedily in value or (B) is of a type
customarily sold on a recognized market, no notice of disposition need be given;
and (ii) with respect to Collateral not described in clause (i) above,
notification sent after default and at least ten days before any proposed
disposition provides notice within a reasonable time before disposition.
Any cash proceeds of any disposition by the Bank of any Collateral
shall be applied by the Bank to payment of expenses in connection with the
Collateral, including reasonable attorneys' fees and legal expenses, and
thereafter to the payment of any of the Liabilities in such order of application
as the Bank may from time to time elect (and thereafter any surplus will be paid
to the Company).
8. General. The Bank shall be deemed to have exercised reasonable care
in the custody and preservation of any of the Collateral in its possession if it
takes such action for that purpose as the Company requests in writing, but
failure of the Bank to comply with any such request shall not of itself be
deemed a failure to exercise reasonable care, and no failure of the Bank to
preserve or protect any right with respect to such Collateral against prior
parties, or to do any act with respect to the preservation of such Collateral
not so requested by the Company, shall be deemed of itself a failure to exercise
reasonable care in the custody or preservation of such Collateral.
The Company agrees that a carbon, photographic or other reproduction of
this Agreement is sufficient as a financing statement.
Any notice from the Bank to the Company, if mailed, shall be deemed
given three business days after the date mailed, postage prepaid, addressed to
the Company either at the Company's address shown on Schedule I hereto or at
such other address as the Company shall have specified in writing to the Bank as
its address for notices hereunder.
-5-
The Company agrees to pay all expenses, including reasonable attorney's
fees and charges (including time charges of attorneys who are employees of the
Bank) paid or incurred by the Bank in endeavoring to collect the Liabilities, or
any part thereof, and in enforcing this Agreement, and such obligations will
themselves be Liabilities.
No delay on the part of the Bank 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.
This Agreement shall remain in full force and effect until all
Liabilities (other than contingent indemnification obligations) have been paid
in full and the Commitment has terminated. If at any time all or any part of any
payment theretofore applied by the Bank to any of the Liabilities is or must be
rescinded or returned by the Bank for any reason whatsoever (including the
insolvency, bankruptcy or reorganization of the Company), such Liabilities
shall, for the purposes of this Agreement, to the extent that such payment is or
must be rescinded or returned, be deemed to have continued in existence,
notwithstanding such application by the Bank, and this Agreement shall continue
to be effective or be reinstated, as the case may be, as to such Liabilities,
all as though such application by the Bank had not been made.
This Agreement shall be construed in accordance with and governed by
the laws of the State of Illinois applicable to contracts made and to be
performed entirely within such State. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
The rights and privileges of the Bank hereunder shall inure to the
benefit of its successors and assigns.
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same Agreement.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED THAT ANY SUIT
SEEKING
-6-
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
BANK'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND OR IN ANY JURISDICTION IN WHICH A BANKRUPTCY, INSOLVENCY
OR OTHER SIMILAR LEGAL OR EQUITABLE PROCEEDING IS PENDING AGAINST THE COMPANY.
THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
BY REGISTERED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH ON SCHEDULE I
HERETO (OR SUCH OTHER ADDRESS AS IT SHALL HAVE SPECIFIED IN WRITING TO THE BANK
AS ITS ADDRESS FOR NOTICES HEREUNDER) OR BY PERSONAL SERVICE WITHIN OR WITHOUT
THE STATE OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
EACH OF THE COMPANY AND THE BANK HEREBY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY FINANCING RELATIONSHIP
EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
-7-
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first above written.
BOARD OF TRADE OF THE CITY OF
CHICAGO, INC.
By:
--------------------------------------
Title:
--------------------------------
BANK ONE, NA (Main Office Chicago)
By:
--------------------------------------
Title:
--------------------------------
SCHEDULE I
TO SECURITY AGREEMENT
Company's Legal Name: Board of Trade of the City of Chicago, Inc.
State of Incorporation: Illinois
Organizational ID: 00-0000000
Chief Executive Office: 000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Principal Place of Business: _000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
SCHEDULE II
TO SECURITY AGREEMENT
TRADE NAMES, PRIOR LEGAL NAMES, ETC.
------------------------------------
Prior Legal Name
----------------
Board of Trade of the City of Chicago
