Exhibit 10.16
Execution Copy
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of November 23, 1994, is by and between
XXXXX XXXXXXX INC., a Delaware corporation (the "Company"), and THE NORTHERN
TRUST COMPANY, an Illinois state banking association (the "Bank").
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Defined Terms. As used in this Agreement the following terms
shall have the following respective meanings (and such meanings shall be equally
applicable to both the singular and plural form of the terms defined, as the
context may require):
"Adjusted Eurodollar Rate": With respect to each Interest Period
applicable to a Eurodollar Rate Advance, an interest rate per annum (rounded
upward, if necessary, to the next one hundredth of one percent) determined by
dividing the Eurodollar Rate for such Interest Period by 1.00 minus the
Eurodollar Reserve Percentage.
"Administrator": As defined in the Collateral Agreement.
"Advance": Any portion of the outstanding Loans as, to which the Company
has elected one of the available interest rate options and, if applicable, an
Interest Period. An Advance may be a Eurodollar Rate Advance or a Federal Funds
Rate Advance.
"Affiliate": When used with reference to any Person, (a) each Person that,
directly or indirectly, controls, is controlled by or is under common control
with, the Person referred to, (b) each Person which beneficially owns or holds,
directly or indirectly, five percent or more of any class of voting stock of the
Person referred to (or if the Person referred to is not a corporation, five
percent or more of the equity interest), (c) each Person, five percent or more
of the voting stock (or if such Person is not a corporation, five percent or
more of the equity interest) of which is beneficially owned or held, directly or
indirectly, by the Person referred to, and (d) each of such Person's officers,
directors, joint venturer and partners. The term control (including the terms
"controlled by" and "under common control with") means the possession, directly,
of the power to direct or cause the direction of the management and policies of
the Person in question.
"Aggregate Debit Items": At any time, the aggregate debit items of the
Company at such time as computed in accordance with the Formula for
Determination of Reserve Requirements for Brokers and Dealers, Exhibit A to Rule
15c3-3.
"Agreement to Pledge": An agreement substantially in the form of
Exhibit A hereto.
"Applicable Margin": With respect to:
(a) Eurodollar Rate Advances --1/2of 1% per annum.
(b) Federal Funds Rate Advances --1/2of 1% per annum.
"Bank": As defined in the opening paragraph hereof.
"Board": The Board of Governors of the Federal Reserve System or any
successor thereto.
"Business Day": Any day (other than a Saturday, Sunday or legal holiday in
the State of Minnesota) on which national banks are permitted to be open for
business in Chicago, Illinois and on which the NYSE is open for trading.
"Cash Collateral": As defined in the Collateral Agreement.
"Capitalized Lease": A lease of (or other agreement conveying the right to
use) real or personal property with respect to which at least a portion of the
rent or other amounts thereon constitute Capitalized Lease Obligations.
"Capitalized Lease Obligations": As to any Person, the obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real or personal property which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP (including Statement of Financial Accounting
Standards No. l 3 of the Financial Accounting Standards Board) and, for purposes
of this Agreement, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP (including such Statement No.
13).
"Change of Control": The occurrence, after the Closing Date, of any of the
following circumstances: (a) the Parent not owning, directly or indirectly,
securities of the Company representing 100% (exclusive of directors' qualifying
shares) of securities of the Company entitled to vote in the election of
directors, or (b) any Person or two or more Persons acting in concert acquiring
beneficial ownership (within the meaning of Rule l 3d-3 of the Commission under
the Exchange Act), directly or indirectly, of securities of the Company (or
other securities convertible into such securities) representing 20% or more of
the combined voting power of all securities of the Parent entitled to vote in
the election of directors, or (c) during any period of up to twelve consecutive
months, whether commencing before or after the Closing Date, individuals who at
the beginning of such twelve-month period were directors of the Parent ceasing
for any reason to constitute a majority of the Board of Directors of the Parent
(other than by reason of death, disability or scheduled retirement), or (d) any
Person or two or more Persons acting in concert acquiring by contract or
otherwise, or entering into a contract or arrangement which upon consummation
will result in its or their acquisition of, control over securities of the
Parent (or other securities convertible into such securities) representing 20%
or more of the combined voting power of all securities of the Parent entitled to
vote in the election of directors.
"Closing Date": Any Business Day between the date of this Agreement and
December l, 1994 selected by the Company for the mailing of the initial Loan
hereunder; provided that all the conditions precedent to the obligation of the
Bank to make the initial Loan, as set forth in Article III, have been, or, on
such Closing Date, will be, satisfied. The Company shall give the Bank not less
than one Business Day's prior notice of the day selected as the Closing Date.
"Code": The Internal Revenue Code of 1986, as amended.
"Collateral Agreement": The Pledge and Collateral Administration Agreement
dated as of November 23, 1994 among the Company, the Bank, various other
Lenders, and The Northern Trust Company, as Administrator.
"Collateral Pool": As defined in the Collateral Agreement.
"Collateral Value": At any time of determination, with respect to an
Eligible Security, a Dollar amount equal to the product of (a) the valuation
rate set forth in the Collateral Agreement for the relevant type of Security (in
the case of Customers' Securities) or 80% (in the case of Firm Securities), and
(b) the amount determined by the Bank (in the case of Firm Securities) or the
Administrator (in the case of Customers' Securities) to be the Market Value of
the Security at such time. The Collateral Value of any Security other than an
Eligible Security shall be zero. The Collateral Value of Cash Collateral shall
be the amount thereof. The Collateral Value of the Collateral Pool shall mean
the aggregate Collateral Values of all Eligible Securities comprising the
Collateral Pool.
"Commission": The Securities and Exchange Commission, or any
regulatory body that succeeds to the functions thereof.
"Commitment": The obligation of the Bank to make Committed Loans to the
Company in an aggregate principal amount outstanding at any time not to exceed
the Commitment Amount upon the terms and subject to the conditions and
limitations of this Agreement.
"Commitment Amount": The maximum unpaid principal amount of Loans which
may from time to time be outstanding hereunder, being initially $35,000,000 but
as the same may from time to time be reduced pursuant to Section 2.9.
"Commitment Date": November 23, 1994.
"Commitment Ending Date": As defined in Section 2.14.
"Committed Loan": As defined in Section 2.1.
"Company": As defined in the opening paragraph hereof.
"Contingent Obligation": With respect to any Person at the time of any
determination, without duplication, any obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other Person (the "primary obligor") in any manner, whether
directly or otherwise: (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or to purchase (or to advance or
supply funds for the purchase of) any direct or indirect security therefor, (b)
to purchase property, securities or services for the purpose of assuring the
owner of such Indebtedness of the payment of such Indebtedness, (c) to maintain
working capital, equity capital or other financial statement condition of the
primary obligor so as to enable the primary obligor to pay such Indebtedness or
otherwise to protect the owner thereof against loss in respect thereof, or (d)
entered into for the purpose of assuring in any manner the owner of such
Indebtedness of the payment of such Indebtedness or to protect the owner against
loss in respect thereof; provided, that the term "Contingent Obligation" shall
not include endorsements for collection or deposit, in each case in the ordinary
course of business.
"Customer": A retail or institutional customer of the Company that owns
securities that are eligible for hypothecation by the Company (acting as a
broker-dealer of securities) under all applicable laws and regulations.
"Customers' Securities": Securities that are "securities carried for
the account of any customer," as that term is defined in Rules 8c-l and
l5c2-l of the Commission, 17 C.F.R. xx.xx. 240.8c-l and 240.l5c2-l.
"Customer Securities Availability": At any given time, the Bank's Pro Rata
Share of the maximum amount of Secured Obligations permitted to be outstanding
under the Collateral Agreement, based upon the Collateral Value of the Eligible
Securities and Cash Collateral in the Collateral Pool at that time.
"Customers' Securities Note": As defined in Section 2.4.
"Default": Any event which, with the giving of notice (whether such notice
is required under Section 7.1, or under some other provision of this Agreement,
or otherwise) or lapse of time, or both, would constitute an Event of Default.
"Discretionary Credit Extension": As defined in Section 2.2.
"Discretionary Credit Subfacility Amount": The maximum aggregate unpaid
principal amount of Discretionary Loans plus unreimbursed Letters of Credit
which may from time to time be outstanding hereunder, being initially
$15,000,000 but as the same may be from time to time reduced as the parties may
agree in writing.
"Discretionary Loan": As defined in Section 2.2.
"DTC": The Depository Trust Company, a New York limited purpose trust
company and a registered "clearing agency" under Section 17A of the Exchange
Act.
"DTC Debt Security": A "security" (as defined in Section 8-102(c) of the
UCC) that (a) is a debt security that is rated at one of the four highest rating
levels (without consideration of sublevels) for its maturity by Standard &
Poor's Ratings Group, Xxxxx'x Investors Service, Inc. or other comparable
nationally recognized rating service and (b) is capable of being (i) identified
by DTC by means of a DTC Pledge Summary Report as having been pledged to the
Bank by the Company or (ii) transferred to the account of the Bank or its agent
at DTC, whether or not such identification or transfer has occurred.
"DTC Equity Security": A "security" (as defined in Section 8-102(c) of the
UCC) that (a) is an equity security issued by a U.S. Person and (b) is capable
of being (I) identified by DTC by means of DTC Pledge Summary Report as having
been pledged to the Bank by the Company or (ii) transferred to the account of
the Bank or its agent at DTC, whether or not such identification or transfer has
occurred.
"DTC Pledge Summary Report": As defined in DTC's "PTD Reference
Manual" dated May, 1991.
"Eligible Security": For purposes of the definitions, "Customer Securities
Availability" and "Collateral Value" (as it pertains to Customers' Securities),
the term "Eligible Security" is as defined in the Collateral Agreement. For
purposes of the Discretionary Credit Subfacility, the term "Eligible Security"
means a Security that (a) is legally available to be pledged or hypothecated by
the Company to the Bank, pursuant to an Agreement to Pledge, (b) is subject as
of the transfer thereof to the Bank to (I) a validly perfected first priority
security interest in favor of the Bank, (ii) no Lien other than the Lien in
favor of the Bank created by the Loan Documents and (iii) no adverse claims (as
defined in Section 8-302 of the UCC) known to the Company which would impair the
value thereof as collateral, (c) is a DTC Debt Security, GNMA Security or
Government Security, (d) is a DTC Equity Security with respect to which the
Company is a qualified OTC market marker (as such term is used in Regulation U),
(e) has not matured or been called prior to its stated maturity or otherwise is
not in default, (f) has not been deemed by the Bank, in its sole discretion, to
be illiquid, and (g) is no a Customers' Security.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate": Any trade or business (whether or not incorporated)
that is a member of a group of which the Company is a member and which is
treated as a single employer under Section 414 of the Code.
"Eurodollar Business Day": A Business Day which is also a day for trading
by and between banks in United States dollar deposits in the interbank
Eurodollar market and a day on which banks are open for business in New York
City.
"Eurodollar Rate": With respect to each Interest Period applicable to a
Eurodollar Rate Advance, the interest rate per annum (rounded upward, if
necessary, to the next one sixteenth of one percent) at which United States
dollar deposits are offered to the Bank in the interbank Eurodollar market two
Eurodollar Business Days prior to the first day of such Interest Period for
delivery in Immediately Available Funds in the interbank Eurodollar market on
the first day of such Interest Period and in an amount approximately equal to
the Advance to which such Interest Period is to apply as determined by the Bank
and for a maturity comparable to the Interest Period; provided, that in lieu of
determining the rate in the foregoing manner, the Bank may substitute the per
annum Eurodollar rate (LIBOR) for United States dollars displayed on the
Telerate Systems, Inc. screen, page 3750 (or other applicable page), on the
first day of such Interest Period or may substitute a rate derived from at least
two or more rates which appear on the Reuters Screen LIBO Page as of 11:00 a.m.
London time, on the day that is two Eurodollar Business Days prior to the first
day of the Interest Period for such Eurodollar Rate Advance. A rate derived from
two or more rates that appear on the Reuters Screen LIBO Page shall be the
arithmetic mean of such rates (rounded as provided above). "Reuters Screen LIBO
Page" means the display designated as page "LIBO" on the Reuter Monitor Money
Rates Service (or such other page as may replace the LIBO page on that service
for the purpose of displaying London InterBank offered rates of major banks for
United States dollar deposits).
"Eurodollar Rate Advance": An Advance with respect to which the interest
rate is determined by reference to the Adjusted Eurodollar Rate.
"Eurodollar Reserve Percentage": As of any day, that percentage expressed
as a decimal) which is in effect on such day, as prescribed by the Board for
determining the maximum reserve requirement (including any basic, supplemental
or emergency reserves) for a member bank of the Federal Reserve System, with
deposits comparable in amount to those held by the Bank, in respect of
"Eurocurrency liabilities" as such term is defined in Regulation D of the Board.
The rate of interest applicable to any outstanding Eurodollar Rate Advances
shall be adjusted automatically on and as of the effective date of any change in
the Eurodollar Reserve Percentage.
"Event of Default": Any event described in Section 7.1.
"Examining Authority": The organization designated by the Securities and
Exchange Commission as the Examining Authority for the Company as provided in
paragraph (c)(12) of Rule l5c3-l.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Facility Fees": As defined in Section 3.11.
"Federal Funds Rate": For any borrowing of Federal Funds Rate Advances,
the rate at which the Bank is offered overnight Federal funds at or about the
rate setting time for such borrowing by three Federal Funds brokers selected by
the Bank. The "rate setting time" with respect to any such borrowing shall be at
10:00 a.m., 11:00 a.m., 12:00 noon, 1:00 p.m. or 2:00 p.m., Chicago time, on the
date such borrowing is to be made and not less than one hour after the Bank has
received notice of such borrowing pursuant to Section 2.3 hereof, or at any
later time that is on the hour on such date, so long as such later time is prior
to the closing of the Federal Funds wire in New York City as such rate setting
time is selected by the Company in the notice of such borrowing delivered
pursuant to Section 2.3 hereof. The "closing of the Federal Funds wire" shall
mean the time at which the Federal Funds wire in New York City customarily
closes or, if there has been a system-wide extension of such closing time, the
time to which the closing of the Federal Funds wire has been extended.
"Federal Funds Rate Advance": An Advance with respect to which the
interest rate is determined by reference to the Federal Funds Rate.
"Firm Collateral Agreement": The Collateral Agreement dated as of
November 23, 1994, between the Company and the Bank.
"Firm Securities": All Securities owned or held by the Company that
are not Customers' Securities.
"Firm Securities Note": As defined in Section 2.4.
"Focus Report": The Financial and Operational Combined Uniform Single
Report required to be filed on a monthly or quarterly basis, as the case may be,
with the Commission or the NYSE, or any report that is required in lieu of such
report.
"GAAP": Generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of any date of determination.
"GNMA Securities": As defined in the Collateral Agreement.
"Governmental Authority": Any nation or government, any state or other
political subdivision thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
including, without limitation, the Commission.
"Government Securities": A security of any one or more of the following
types: a security issued by the United States Treasury, the Federal National
Mortgage Association, the Federal Home Loan Mortgage Corporation, the Resolution
Funding Corporation, the Student Loan Marketing Association, the Export-Import
Bank of the United States, the United States Postal Service, the Federal
Financing Bank, the Tennessee Valley Authority, the Federal Home Loan Bank, the
Farm Credit System or the Farmers Home Administration or by any other agency of
the United States government that has been previously approved by the Bank as
being eligible for pledging under this Agreement and, with respect to each of
the foregoing, that is maintained in book-entry form on the records of a Federal
Reserve Bank or DTC; provided, that any of the foregoing types of Government
Securities shall cease to be Government Securities for purposes of this
Agreement at any time that, as a result of legislative, regulatory or judicial
action, the relationship between the agency issuing such Government Security and
the United States government, or the status of such Government Security with
respect to its support by the United States government, has been changed in any
way.
"Immediately Available Funds": Funds with good value on the day and in
the city in which payment is received.
"Indebtedness": With respect to any Person at the time of any
determination, without duplication, all obligations, contingent or otherwise, of
such Person which in accordance with GAAP should be classified upon the balance
sheet of such Person as liabilities, but in any event including: (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (c)
all obligations of such Person upon which interest charges are customarily paid
or accrued, (d) all obligations of such Person under conditional sale or other
title retention agreements relating to property purchased by such Person, (e)
all obligations of such Person issued or assumed as the deferred purchase price
of property or services, (f) all obligations of others secured by any Lien on
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Capitalized Lease Obligations of such
Person, (h) all obligations of such Person in respect of interest rate
protection agreements, (i) all obligations of such Person, actual or contingent,
as an account party in respect of letters of credit or bankers' acceptances, (j)
all obligations of any partnership or joint venture as to which such Person is
or may become personally liable, and (k) all Contingent Obligations of such
Person.
"Interest Period": With respect to each Eurodollar Rate Advance, the
period commencing on the date such Advance is made or converted from a Federal
Funds Rate Advance or on the last day of the immediately preceding Interest
Period, if any, applicable to an outstanding Advance and ending seven, fourteen,
thirty, sixty or ninety days thereafter, as the Company may elect in the
applicable notice of borrowing, continuation or conversion; provided that:
(a) Any Interest Period which would otherwise end on a day which is not a
Eurodollar Business Day shall be extended to the next succeeding
Eurodollar Business Day unless such Eurodollar Business Day falls in the
next calendar month, in which case such Interest Period shall end on the
next preceding Eurodollar Business Day;
(b) Any Interest Period which begins on the last Eurodollar Business Day
of a calendar month (or a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Eurodollar Business Day of a calendar
month; and
(c) No Interest Period shall end after the Commitment Ending Date.
"Investment": The acquisition, purchase, mailing or holding of any stock
or other security, any loan, advance, contribution to capital, extension of
credit (except for trade and customer accounts receivable for inventory sold or
services rendered in the ordinary course of business and payable in accordance
with customary trade terms), any acquisitions of real or personal property
(other than real and personal property acquired in the ordinary course of
business) and any purchase or commitment or option to purchase stock or other
debt or equity securities of or any interest in another Person or any integral
part of any business or the assets comprising such business or part thereof. The
amount of any Investment shall be the original cost of such Investment plus the
cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment.
"Knowledge": With respect to any occurrence or event, when such occurrence
or event is brought to the attention of a responsible officer of the Company or
should have been brought to such officer's attention if the Company had
exercised due diligence.
"Lenders": As defined in the Collateral Agreement.
"Letter of Credit": As defined in Section 2.2.
"Leverage Ratio": At the time of any determination, the ratio of (a)
Total Assets to (b) Tangible Net Worth of the Company.
"Lien": With respect to any Person, any security interest, mortgage,
pledge, lien, charge, encumbrance, title retention agreement or analogous
instrument or device (including the interest of each lessor under any
Capitalized Lease), in, of or on any assets or properties of such Person, now
owned or hereafter acquired, whether arising by agreement or operation of law.
"Liquidation Notice": As defined in the Collateral Agreement.
"Loan": A Committed Loan or a Discretionary Loan.
"Loan Date": The date of the mailing of any Loan hereunder.
"Loan Documents": This Agreement, the Notes, the Collateral Agreement,
the Firm Collateral Agreement and any Agreements to Pledge.
"Market Value": For purposes of the Discretionary Credit Subfacility, the
term "Market Value" means, with respect to any Security, the final price bid for
such Security on the Business Day immediately preceding the date of valuation of
such Security, as determined by reference (a) in the case of DTC Equity
Securities, DTC Debt Securities and Government Securities at DTC, to the DTC
"Participant Terminal Services" system, (b) in the case of Governmental
Securities (other than those held at DTC), to any securities pricing services
that are regularly recognized in national financial markets or, if no such
pricing services are available on any Business Day, to The Wall Street Journal,
and (c) in the case of GNMA Securities, to the pricing system provided by PTC.
Such determinations shall be made reasonably and in good faith and shall be
conclusive in the absence of manifest error. For purposes of the Commitment, the
term "Market Value" is as defined in the Collateral Agreement.
"Material Subsidiary": A Subsidiary having Tangible Net Worth in
excess of $l,000,000.
"Multiemployer Plan": A multiemployer plan, as such term is defined in
Section 4001(a)(3) of ERISA, which is maintained (on the Closing Date, within
the five years preceding the Closing Date, or at any time after the Closing
Date) for employees of the Company or any ERISA Affiliate.
"NASD": The National Association of Securities Dealers, Inc., or any other
self-regulatory organization that succeeds to the functions thereof.
"Net Capital": As determined in accordance with the capital requirements,
rules and regulations of the NYSE that are applicable to the Company at any time
of determination.
"Notes": Collectively, the Customers' Securities Note and the Firm
Securities Note.
"NYSE": The New York Stock Exchange.
"Obligations": (a) The Company's obligations in respect of the due and
punctual payment of principal and interest on the Notes when and as due, whether
by acceleration or otherwise and (b) all fees (including Facility Fees),
expenses, indemnities, reimbursements and other obligations of the Company under
this Agreement or any other Loan Document, in all cases whether now existing or
hereafter arising or incurred.
"Official Lien": means any Lien which represents (a) a Lien in favor of a
Governmental Authority (i) to secure obligations owing to such Governmental
Authority in its official capacity (and not as a lender or transaction
counterparty or in another similar capacity that may be undertaken by a Person
that is not a Governmental Authority) or (ii) to enforce or secure, or imposed
as, a penalty, fine, forfeiture or other like remedy or (b) a Lien effected by
judicial process, unless in the case of either clause (a) or (b), such Lien has
been discharged, stayed, vacated or bonded (by property other than the Pledged
Securities). For purposes of this definition, (x) "Lien" includes any Lien which
has not yet become effective but the effectiveness of which in the future is
provided for in an order, decree or other determination of a court or other
applicable Governmental Authority or in an agreement to which the owner of the
interest in the property to be subject thereto is a party if such effectiveness
will occur solely upon the passage of time and not as a result of any action or
inaction on the part of any Person, whether or not such Lien would otherwise be
a "Lien" hereunder and (y) "Official Lien" includes any Lien which secures a
bond of any other Official Lien or of any judgment, claim, order or other
determination of a Governmental Authority in its official capacity or which is
granted or entered in connection with any judicial process.
"Parent": Xxxxx Xxxxxxx Companies Inc., a Delaware corporation.
"PBGC": The Pension Benefit Guaranty Corporation, established pursuant to
Subtitle A of Title IV of ERISA, and any successor thereto or to the functions
thereof.
"Person": Any natural person, corporation, partnership, joint venture,
firm, association, trust, unincorporated organization, government or
governmental agency or political subdivision or any other entity, whether acting
in an individual, fiduciary or other capacity.
"Plan": Each employee benefit plan (whether in existence on the Closing
Date or thereafter instituted), as such term is defined in Section 3 of ERISA,
maintained for the benefit of employees, officers or directors of the Company or
of any ERISA Affiliate.
"Pledged Securities": Firm Securities subject to Agreements to Pledge
and Customers' Securities subject to the Collateral Agreement.
"Pro Rata Share": The fraction whose numerator is the principal amount
outstanding of the Committed Loans and whose denominator is the aggregate
principal amount outstanding of the Lenders' Secured Obligations (including the
outstanding Committed Loans).
"Producer Loan": A loan made to an employee of the Company pursuant to
which the Company has agreed to forgive all or a portion of such loan upon the
achievement of certain production goals by such employee.
"Prohibited Transaction": The respective meanings assigned to such term in
Section 4975 of the Code and Section 406 of ERISA.
"PTC": Participants Trust Company, a New York limited purpose trust
company and a registered "clearing agency" under Section l7.A of the Exchange
Act.
"Regulations D, T, U and X": Regulations D, T, U and X, respectively, of
the Board, as the same may be modified and supplemented and in effect from time
to time.
"Regulatory Change": Any change after the Closing Date in federal, state
or foreign laws or regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks including
the Bank under any federal, state or foreign laws or regulations (whether or not
having the force of law) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.
"Reportable Event": 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 has waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event; provided, 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 waivers in accordance
with Section 412(d) of the Code.
"Rule l5c3-3": Rule 15c3-3 promulgated under the Exchange Act.
"Secured Obligations": As defined in the Collateral Agreement.
"Securities": Collectively, DTC Debt Securities, DTC Equity
Securities, Government Securities and GNMA Securities.
"Securities Act": The Securities Act of 1933, as amended.
"Self-Regulatory Organization": As defined in Section 3(a)(26) of the
Exchange Act.
"SIPA": The Securities Investor Protection Act of 1970, as amended.
"Special Reserve Account": The special reserve bank account maintained by
the Company with the Bank for the exclusive benefit of Customers pursuant to
Rule l5c3-3.
"Subsidiary": Any corporation or other entity of which securities or other
ownership interests having ordinary voting power for the election of a majority
of the board of directors or other Persons performing similar functions are
owned by the Company either directly or through one or more Subsidiaries.
"Tangible Net Worth": With respect to any Person, at the date of any
determination, the sum of the amounts set forth on the consolidated, if
applicable, balance sheet of such Person, as the sum of the common stock,
preferred stock, additional paid-in capital and retained earnings of such Person
(excluding treasury stock), less the net book value of all assets of such Person
and its subsidiaries (to the extent reflected as an asset on such consolidated
balance sheet) that would be treated as intangibles under GAAP, including all
such items as goodwill, trademarks, trade names, service marks, copyrights,
patents, licenses, unamortized debt discount and expenses and the excess of the
purchase price of the assets of any business acquired by such Person or any
subsidiary over the book value of such assets, and less obligations owed to such
person by any Affiliate. Tangible Net Worth of the Parent shall exclude loans
made by the Parent to any of its officers, directors or employees.
"Termination Date": The earliest of (a) the Commitment Ending Date, (b)
the date on which the Commitment is terminated pursuant to Section 7.2 or (c)
the date on which the Commitment Amount is reduced to zero or the Commitment is
terminated pursuant to Section 2.9 hereof.
"Total Assets": At the time of any determination, the net book value
of all assets of the Company as determined in accordance with GAAP.
"UCC": The Uniform Commercial Code as in effect from time to time in
the State of Minnesota.
"U.S. Person": Any corporation, partnership, association or trust that
issues Securities and that is organized under the laws of the United States of
America or any one of its states.
Section 1.2 Accounting Terms and Calculations. Except as may be expressly
provided to the contrary herein, all accounting terms used herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with GAAP. To the extent any change in GAAP affects any computation
or determination required to be made pursuant to this Agreement, such
computation or determination shall be made as if such change in GAAP had not
occurred unless the Company and the Bank agree in writing on an adjustment to
such computation or determination to account for such change in GAAP.
Section 1.3 Computation of Time Periods. In this Agreement, in the
computation of a period of time from a specified date to a later specified date,
unless otherwise stated the word "from" means "from and including" and the word
"to" or "until" each means "to but excluding".
Section 1.4 Other Definitional Terms. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. References to Sections, Exhibits, Schedules and like references are
to this Agreement unless otherwise expressly provided. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation." Unless the context in which used herein otherwise clearly requires,
"or" has the inclusive meaning represented by the phrase "and/or".
ARTICLE II
TERMS OF LENDING
Section 2. l The Commitment. On the terms and subject to the conditions
hereof, the Bank agrees to make loans (each, a "Committed Loan" and,
collectively, the "Committed Loans") to the Company on a revolving basis at any
time and from time to time from the Closing Date to the Termination Date, during
which period the Company may borrow, repay and reborrow in accordance with the
provisions hereof; provided, that (a)(i) the unpaid principal amount of
outstanding Loans (inclusive of outstanding Discretionary Loans) and (ii) the
unreimbursed face amount of all outstanding Letters of Credit shall not at any
time exceed the Commitment Amount, and (b) the unpaid principal amount of
outstanding Committed Loans shall not at any time exceed the Customers'
Securities Availability. Loans may be obtained and maintained, at the election
of the Company but subject to the limitations hereof, as Federal Funds Rate
Advances or Eurodollar Rate Advances or any combination thereof.
Section 2.2 Discretionary Credit Subfacility.
2.2(a) Discretionary Credit Subfacility. The Bank agrees to consider
the Company's requests, from time to time, for Loans (the "Discretionary Loans")
and standby letters of credit (as may be evidenced by such documents and
agreements as the Bank may from time to time determine, the "Letters of Credit")
having an aggregate principal or face amount, as the case may be, outstanding
from time to time from the Effective Date until the Termination Date, not to
exceed the Discretionary Credit Subfacility Amount, and the Bank may (in its
sole and unlimited discretion) make the requested Loans or issue the requested
Letters of Credit (collectively, the "Discretionary Credit Extensions"). Nothing
contained in this Agreement shall be construed to constitute a commitment to
make any Discretionary Credit Extension even if the Company satisfies all terms
and conditions specified herein with respect to Discretionary Credit Extensions.
2.2(b) Special Borrowing Procedures. In addition to the procedures
specified in Section 2.3 of this Agreement, the Company will deliver to the Bank
no later than 5:00 p.m. (Chicago time) on any day on which the Company has made
a request for a Discretionary Credit Extension an Agreement to Pledge covering
Firm Securities that upon delivery to the Bank must qualify as Eligible
Securities with an attached list of such Firm Securities stating the Market
Value thereof. On any Business Day on which a Discretionary Credit Extension
remains outstanding as of 3:30 p.m. (Chicago time), the Company shall deliver to
the Bank a list of the Firm Securities subject to the Agreement to Pledge that
was delivered with the request for such Discretionary Credit Extension, whether
or not such Firm Securities have been delivered to the Bank, stating the Market
Value thereof. By delivering each such list or Agreement to Pledge, the Company
shall be deemed to grant the Bank a security interest in the listed Firm
Securities and to represent and covenant that: (i) the listed Securities are
Eligible Securities; (ii) the listed Securities will not be sold, pledged or
otherwise transferred to any person other than the Bank prior to 9:00 a.m. on
the Business Day after the day on which the Company delivers the list to the
Bank; (iii) the Company will, upon demand by the Bank, deliver all Securities
described in any such list then current, or (if such demand is made after 9:00
a.m. on the Business Day after the Bank's receipt of the most recent such list),
other Firm Securities acceptable to the Bank that are Eligible Securities with
an aggregate Market Value at least equal to the aggregate Market Value of the
listed Securities, to the Bank, and pledge those Securities to the Bank as
security for all Discretionary Credit Extensions then outstanding; and (iv) any
Securities listed in Agreements to Pledge in effect for 15 consecutive calendar
days will be delivered and pledged to the Bank by the Company as security for
all Discretionary Credit Extensions then outstanding (as applicable on the first
Business Day following that fifteenth consecutive day).
2.2(c) Minimum Collateral Value. The aggregate Collateral Value of
Firm Securities subject to Agreements to Pledge in favor of the Bank shall at
all times equal or exceed the aggregate unpaid principal amount of all
Discretionary Loans and unreimbursed face amount of all Letters of Credit.
Section 2.3 Procedure for Loans. Any request by the Company for a Loan
shall be in writing, or by telephone promptly confirmed in writing, and must be
given so as to be received by the Bank not later than 3:30 p.m. (Chicago time)
two Eurodollar Business Days prior to the requested Loan Date if the Loan is
requested as a Eurodollar Rate Advance, and not later than 3:30 p.m. (Chicago
time) on the requested Loan Date if the Loan is requested as a Federal Funds
Rate Advance. The Bank may, in its sole discretion, accept requests for Loans
after 3:30 p.m. (Chicago time). Each request for a Loan shall be irrevocable and
shall be deemed a representation by the Company that on the requested Loan Date
and after giving effect to such Loan the applicable conditions specified in
Article III have been and will continue to be satisfied. Each request for a Loan
shall specify (a) the requested Loan Date, (b) the amount of such Loan which
shall be in a minimum amount of $500,000 or, if more, an integral multiple
thereof, (c) whether such Loan is to be funded as a Federal Funds Rate Advance
or a Eurodollar Rate Advance, (d) in the case of a Loan made as a Eurodollar
Rate Advance, the duration of the initial Interest Period applicable thereto,
and (e) whether such Loan is requested as a Committed Loan or a Discretionary
Loan. Unless the Bank determines that any applicable condition specified in
Section 2. l or in Article III has not been satisfied, or has determined (in its
sole and unlimited discretion) not to make a requested Discretionary Credit, the
Bank will make available to the Company at the Bank's principal office in
Chicago, Illinois in Immediately Available Funds not later than 4:30 p.m.
(Chicago time) on the requested Loan Date the amount of the requested Loan. In
the event that the Bank determines that the Customers' Securities Availability
is not sufficient to cover a requested Committed Loan, the Bank may, in its sole
discretion, make a Committed Loan in an amount that is covered by Customers'
Securities Availability. Without in any way limiting the Company's obligation to
confirm in writing any telephonic request for a Loan, the Bank may rely on any
such request which it believes in good faith to be genuine; and the Company
hereby waives the right to dispute the Bank's record of the terms of such
telephonic request for a Loan. Each request by the Company for the issuance of a
Letter of Credit shall be processed by the Bank in accordance with its normal
procedures and practices with respect to standby letters of credit and the Bank
shall determine (in its sole and unlimited discretion) whether or not to issue
any particular Letter of Credit.
Section 2.4 The Notes. The Company's obligation to repay all Committed
Loans shall be evidenced by a promissory note substantially in the form of
Exhibit B hereto (the "Customers' Securities Note"). The Company's obligation to
repay all Discretionary Loans shall be evidenced by a promissory note
substantially in the form of Exhibit C hereto (the "Firm Securities Note"). The
Bank shall enter in its ledgers and records the amount of each Loan, the various
Advances made, converted or continued and the payments made thereon, and the
Bank is authorized by the Company to enter on a schedule attached to each Note a
record of such Loans, Advances and payments; provided, however that the failure
by the Bank to make any such entry or any error in making such entry shall not
limit or otherwise affect the obligation of the Company hereunder and on the
Notes, and, in all events, the principal amount owing by the Company in respect
of the Notes shall be the aggregate amount of all Loans made by the Bank less
all payments of principal thereof made by the Company.
Section 2.5 Conversions and Continuations. On the terms and subject to the
limitations hereof, the Company shall have the option at any time and from time
to time to convert all or any portion of the Advances into Federal Funds Rate
Advances or Eurodollar Rate Advances, or to continue a Eurodollar Rate Advance
as such; provided, however that a Eurodollar Rate Advance may be converted or
continued only on the last day of the Interest Period applicable thereto and no
Advance may be converted or continued as a Eurodollar Rate Advance if a Default
or Event of Default has occurred and is continuing on the proposed date of
continuation or conversion. Advances may be converted to, or continued as,
Eurodollar Rate Advances only in amounts of $500,000 or an integral multiple
thereof. The Company shall give the Bank written notice of any continuation or
conversion of any Advance and such notice must be given so as to be received by
the Bank not later than 12:00 noon (Chicago time) two Eurodollar Business Days
prior to the requested date of conversion or continuation in the case of the
continuation of, or conversion to, a Eurodollar Rate Advance or conversion to a
Federal Funds Rate Advance. Each such notice shall specify (a) the amount to be
continued or converted, (b) the date for the continuation or conversion (which
must be (i) the last day of the preceding Interest Period for any continuation
or conversion of Eurodollar Rate Advances, (ii) a Eurodollar Business Day in the
case of conversions to or continuations as Eurodollar Advances, and (iii) a
Business Day in the case of conversions to Federal Funds Rate Advances, and (c)
in the case of conversions to or continuations as Eurodollar Rate Advances, the
Interest Period applicable thereto. Any notice given by the Company under this
Section shall be irrevocable. If the Company shall fail to notify the Bank of
the continuation of any Eurodollar Rate Advance within the time required by this
Section, such Advance shall, on the last day of the Interest Period applicable
thereto, automatically be converted into a Federal Funds Rate Advance of the
same principal amount.
Section 2.6 Interest Rates, Interest Payments and Default Interest.
Interest shall accrue and be payable as follows:
2.6(a) Each Eurodollar Rate Advance shall bear interest on the
unpaid principal amount thereof during the Interest Period applicable thereto at
a rate per annum equal to the sum of (i) the Adjusted Eurodollar Rate for such
Interest Period, plus (ii) the Applicable Margin.
2.6(b) Each Federal Funds Rate Advance shall bear interest on the
unpaid principal amount thereof at a floating rate per annum equal to the sum of
(i) the Federal Funds Rate, plus (ii) the Applicable Margin.
2.6(c) Effective upon notice from the Bank, whenever any Default or
Event of Default shall have occurred and be continuing (whether or not the
maturity of the Notes shall have been accelerated), interest shall accrue on
each Advance until such Default or Event of Default shall have been cured to the
written satisfaction of the Bank or, if such Default or Event of Default
consists of the Company's failure to pay the Bank any amount owing under any
Loan Document, until such amount shall have been paid in full (i) during the
balance of any Interest Period applicable to such Advance, at a rate per annum
equal to the sum of the rate applicable to such Advance during such Interest
Period plus 2.0% and (ii) otherwise, at a rate per annum equal to the sum of (x)
the Federal Funds Rate, plus (y) the Applicable Margin for Federal Funds
Advances, plus (z) 2.0%.
2.6(d) Interest shall be payable (i) with respect to each Eurodollar
Rate Advance on the last day of the Interest Period applicable thereto; (ii)
with respect to any Federal Funds Rate Advance, on the first day of each month;
(iii) with respect to Discretionary Loans, upon each day that principal is due;
(iv) with respect to all Advances, upon any permitted prepayment (on the amount
prepaid); and (iv) with respect to all Advances, on the Termination Date;
provided that interest under Section 2.6(c) shall be payable on demand.
Section 2.7 Repayment.
2.7(a) Principal of the Committed Loans, together with all accrued
and unpaid interest thereon, shall be due and payable on the Termination Date.
2.7(b) Principal of Discretionary Loans, together with all accrued
and unpaid interest thereon, shall be due and payable on demand, which demand
may be for payment in whole or in part, irrespective of the occurrence or
nonoccurrence of any Default or Event of Default. If demand is not sooner made,
each Discretionary Loan shall be due and payable on the first Business Day
following the date on which such Discretionary Loan was made, together with all
accrued and unpaid interest thereon.
Section 2.8 Optional Prepayments. The Company may prepay Federal Funds
Rate Advances, in whole or in part, at any time, without premium or penalty. Any
such prepayment must be accompanied by accrued and unpaid interest on the amount
prepaid. Each partial prepayment shall be in an amount of $500,000 or an
integral multiple thereof. Except upon an acceleration following an Event of
Default or upon termination of the Commitment under Section 2.9, the Company may
pay a Eurodollar Rate Advance only on the last day of the Interest Period
applicable thereto. Amounts paid (unless following an acceleration or upon
termination of the Commitment) or prepaid under this Section 2.8 may be
reborrowed upon the terms and subject to the conditions and limitations of this
Agreement.
Section 2.9 Optional Reduction of Commitment Amount or Termination of
Commitment. The Company may, at any time, upon not less than five Business Days
prior written notice to the Bank, reduce the Commitment Amount, with any such
reduction in a minimum amount of $500,000, or, if more, in an integral multiple
of $500,000; provided, however, that the Company may not reduce the Commitment
Amount at a time and in an amount if such reduction and the payment required by
the next sentence would result in any outstanding Eurodollar Rate Advance being
repaid, in whole or in part, prior to the last day of the Interest Period
applicable to such Advance. Upon any reduction in the Commitment Amount pursuant
to this Section, the Company shall pay to the Bank the amount, if any, by which
the aggregate unpaid principal amount of outstanding Loans exceeds the
Commitment Amount as so reduced. Amounts so paid cannot be reborrowed. The
Company may, at any time, upon not less than five Business Days prior written
notice to the Bank, terminate the Commitment in its entirety. Upon termination
of the Commitment pursuant to this Section, the Company shall pay to the Bank
the full amount of all outstanding Loans, all accrued and unpaid interest
thereon, all unpaid Facility Fees accrued to the date of such termination, any
indemnities payable pursuant to Section 2.19 and all other unpaid obligations of
the Company to the Bank hereunder.
Section 2.10 Delivery of Collateral; Mandatory Prepayments.
2.10(a) At any time that the outstanding principal amount of the
Customers' Securities Note exceeds the Customers' Securities Availability, the
Company shall comply with Section 4.1(b) of the Collateral Agreement.
2.10(b) Without limiting to any degree the demand nature of the
Obligations under the Firm Securities Note, the Company shall at any time that
the outstanding principal amount of the Firm Securities Note exceeds the
aggregate Collateral Value of the Firm Securities subject to Agreements to
Pledge, immediately prepay the principal amount of the Xxxx Securities Note in
the amount of such excess and pay all accrued and unpaid interest on such
amount.
Section 2.11 Facility Fee. The Company shall pay to the Bank fees (the
"Facility Fees") in an amount determined by applying a rate of .20% per annum to
the amount of the Commitment for the period from the Commitment Date to the
Termination Date. Such Facility Fees are payable quarterly in arrears on the
last day of each quarter, commencing on December 31, 1994, and on the
Termination Date.
Section 2.12 Computation. Facility Fees and interest on Advances
shall be computed on the basis of actual days elapsed and a year of 360 days.
Section 2. l3 Payments. Payments and prepayments of principal of, and
interest on, the Notes and all fees, expenses and other obligations under this
Agreement payable to the Bank shall be made without setoff or counterclaim in
Immediately Available Funds not later than 3:00 p.m. (Chicago time) on the dates
called for under this Agreement at the main office of the Bank in Chicago,
Illinois. Funds received on any day after such time shall be deemed to have been
received by the Bank on the next Business Day. Whenever any payment to be made
hereunder or on either Note shall be stated to be due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day and
such extension of time, in the case of a payment of principal, shall be included
in the computation of any interest on such principal payment.
Section 2.14 Commitment Ending Date and Extension. The "Commitment Ending
Date" is November 22, 1995; provided, however, that if the Company by written
notice given to the Bank at least 45 days but not more than 180 days prior to
the Commitment Ending Date requests in writing an initial extension of the
Commitment Ending Date for an additional period of time, not to exceed l 80
days, and if the Bank, in its sole and absolute discretion and based on such
review of the Company's financial performance and condition and such other
factors as the Bank considers relevant (which may include future loan policies
and other policies adopted by the Bank unrelated to the Company's financial
condition), consents in writing to such extension, then the Commitment Ending
Date shall be extended for such additional period of time, which in the case of
the initial extension shall not exceed 180 days, and in such extended period the
Company may repeat its request within the same time limit and, if the Bank
consents, the Commitment Ending Date shall be further extended for an additional
period, not to exceed 360 days, and so on from time to time; provided, that in
the case of the initial extension period, the written notice given to the Bank
during such period shall be given not more than 90 days prior to the Commitment
Ending Date. The Bank's failure to respond to the Company's written request for
an extension within 45 days of the Bank's receipt thereof shall be deemed a
denial of such request. In the case of any such extension, the "Commitment
Ending Date" shall be the last day of the period to which such extension has
been granted. The Bank shall be under no obligation or commitment to extend the
Commitment Ending Date, and no such obligation or commitment on the part of the
Bank should be inferred from the provisions of this Section.
Section 2.15 Use of Proceeds. The proceeds of the initial Loan shall be
used first for paying all outstanding Indebtedness of the Company to the Bank.
Any remaining balance of the initial Loan and the proceeds of any subsequent
Loans shall be used for the Company's short-term working capital needs in
compliance with all applicable legal and regulatory requirements, including,
without limitation, Regulations T, U and X and the Securities Act and the
Exchange Act and the regulations thereunder. The Bank shall have no
responsibility as to the use of any such proceeds.
Section 2.16 Interest Rate Not Ascertainable, Etc. If, on or prior to the
date for determining the Adjusted Eurodollar Rate in respect of the Interest
Period for any requested Eurodollar Rate Advance, the Bank determines (which
determination shall be conclusive and binding, absent error) that:
(a) deposits in dollars (in the applicable amount) are not
being made available to the Bank in the relevant market for such
Interest Period, or
(b) the Adjusted Eurodollar Rate will not adequately and fairly
reflect the cost to the Bank of funding or maintaining Eurodollar
Rate Advances for such Interest Period,
the Bank shall forthwith give notice to the Company of such determination,
whereupon the obligation of the Bank to make or continue, or to convert any
Advances to Eurodollar Rate Advances shall be suspended until the Bank notifies
the Company that the circumstances giving rise to such suspension no longer
exist. No such suspension shall affect the interest rate then in effect during
the applicable Interest Period for any Eurodollar Rate Advance outstanding at
the time such suspension is imposed.
Section 2. l7 Increased Cost. If any Regulatory Change:
(a) shall subject the Bank to any tax, duty or other charge with
respect to Eurodollar Rate Advances, the Note or its obligation to
make Eurodollar Rate Advances, or shall change the basis of taxation
of payment to the Bank of the principal of or interest on Eurodollar
Rate Advances or any other amounts due under this Agreement in
respect of Eurodollar Rate Advances or its obligation to make
Eurodollar Rate Advances (except for changes in the rate of tax on
the overall net income of the Bank imposed by the laws of the United
States or any jurisdiction in which the Bank's principal office is
located); or
(b) shall impose, modify or deem applicable any reserve, special
deposit, capital requirement or similar requirement (including any
such requirement imposed by the Board, but excluding any Eurodollar
Rate Advance any such requirement to the extent included in
calculating the applicable Adjusted Eurodollar Rate) against assets
of, deposits with or for the account of, or credit extended by, the
Bank or shall impose on the Bank or on the interbank Eurodollar
market any other condition affecting Eurodollar Rate Advances, the
Notes or its obligation to make Eurodollar Rate Advances;
and the result of any of the foregoing is to increase the cost to the Bank of
making or maintaining any Eurodollar Rate Advance, or to reduce the amount of
any sum received or receivable by the Bank under this Agreement or under either
Note, then, within 30 days after demand by the Bank, the Company shall pay to
the Bank such additional amount or amounts as will compensate the Bank for such
increased cost or reduction. The Bank will promptly notify the Company of any
event of which it has knowledge, occurring after the date hereof, which will
entitle the Bank to compensation pursuant to this Section. A certificate of the
Bank claiming compensation under this Section, setting forth the additional
amount or amounts to be paid to it hereunder and stating in reasonable detail
the basis for the charge and the method of computation, shall be conclusive in
the absence of error. In determining such amount, the Bank may use any
reasonable averaging and attribution methods. Failure on the part of the Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable with respect to any Interest Period shall not constitute a waiver of
the Bank's rights to demand compensation for any increased costs or reduction in
amounts received or receivable in any subsequent Interest Period.
Section 2.18 Illegality. If any Regulatory Change shall make it unlawful
or impossible for the Bank to make, maintain or fund Eurodollar Rate Advances,
the Bank shall notify the Company, whereupon the obligation of the Bank to make
Eurodollar Rate Advances shall be suspended until the Bank notifies the Company
that the circumstances giving rise to such suspension no longer exist. If the
Bank determines that it may not lawfully continue to maintain any outstanding
Eurodollar Rate Advances to the end of the applicable Interest Periods, all of
the affected Advances shall be automatically converted to Federal Funds Rate
Advances as of the date of the Bank's notice, and upon such conversion the
Company shall indemnify the Bank in accordance with Section 2.20.
Section 2.19 Capital Adequacy. In the event that any Regulatory Change
reduces or shall have the effect of reducing the rate of return (by an amount
the Bank deems material) on the Bank's capital or the capital of its parent
corporation as a consequence of the Commitment and/or the Loans to a level below
that which the Bank or the Bank's parent corporation could have achieved but for
such Regulatory Change (taking into account the Bank's policies and the policies
of the Bank's parent corporation with respect to capital adequacy), then the
Company shall, within five days after written notice and demand from the Bank,
pay to the Bank additional amounts sufficient to compensate the Bank or the
Bank's parent corporation for such reduction; provided, however, that no payment
shall be required due to any increase in capital due to a regulatory authority's
assessment of the Bank's or its parent corporation's financial condition. Any
determination by the Bank under this Section and any certificate as to the
amount of such reduction given to the Company by the Bank shall be final,
conclusive and binding for all purposes, absent error.
Section 2.20 Funding Losses. The Company shall compensate the Bank, upon
its written request, for all losses, expenses and liabilities (including any
interest paid by the Bank to lenders of funds borrowed by it to make or carry
Eurodollar Rate Advances to the extent not recovered by the Bank in connection
with the re-employment of such funds and including loss of anticipated profits)
which the Bank may sustain: (a) if for any reason, other than a default by the
Bank, a funding of a Eurodollar Rate Advance does not occur on the date or in
the amount specified therefor in the Company's request or notice as to such
Advance under Section 2.2(b) or 2.3, or (b) if, for whatever reason (including
acceleration of the maturity of the Note following an Event of Default), any
repayment of a Eurodollar Rate Advance, or a conversion pursuant to Section 2.17
occurs on any day other than the last day of the Interest Period applicable
thereto. The Bank's request for compensation shall set forth the basis for the
amount requested and shall be final, conclusive and binding, absent error.
Section 2.21 Discretion of Bank as to Manner of Funding. The Bank shall be
entitled to fund and maintain its funding of Eurodollar Rate Advances in any
manner it may elect, it being understood, however, that for the purposes of this
Agreement all determinations hereunder (including determinations under Section
2.20), shall be made as if the Bank had actually funded and maintained each
Eurodollar Rate Advance during the Interest Period for such Advance through the
purchase of deposits, having a maturity corresponding to the last day of the
Interest Period and bearing an interest rate equal to the Eurodollar Rate for
such Interest Period.
ARTICLE III
CONDITIONS PRECEDENT
Section 3. l Conditions of Initial Loan. The obligation of the
Bank to make the initial Loan hereunder shall be subject to the prior or
simultaneous fulfillment of each of the following conditions:
3.1(a) Documents. The Bank shall have received the
following:
(i) The Notes executed by a duly authorized officer (or
officers) of the Company and dated the Closing Date.
(ii) The Collateral Agreement duly executed by the
Company, the Administrator and the Lenders.
(iii) The Firm Collateral Agreement duly executed by the
Company.
(iv) A copy of the corporate resolutions of the Company
authorizing the execution, delivery and performance of the
Loan Documents, certified as of the Closing Date by the
Secretary or an Assistant Secretary of the Company.
(v) An incumbency certificate showing the names and titles,
and bearing the signatures of, the officers of the Company
authorized to execute the Loan Documents and to request Loans
and conversions and continuations of Advances hereunder,
certified as of the Closing Date by the Secretary or an
Assistant Secretary of the Company.
(vi) A copy of the Certificate of Incorporation of the Company
with all amendments thereto, certified by the appropriate
governmental official of the jurisdiction of its incorporation
as of a date not more than ten days prior to the Closing Date.
(vii) A certificate of good standing for the Company in the
jurisdiction of its incorporation and in the State of
Minnesota, certified by the appropriate governmental officials
as of a date not more than ten days prior to the Closing Date.
(viii) A copy of the bylaws of the Company, certified
as of the Closing Date by the Secretary or an Assistant
Secretary of the Company.
(ix) A certificate dated the Closing Date of the chief
executive officer or chief financial officer of the Company
certifying as to the matters set forth in Sections 3.2(a) and
3.2(b) below.
3.1(b) Opinion. The Company shall have requested Xxxxx Xxxxxxxx, its
general counsel, to prepare a written opinion, addressed to the Bank and dated
the Closing Date, covering the matters set forth in Exhibit D hereto, and such
opinion shall have been delivered to the Bank.
3.1(c) Compliance. The Company shall have performed and complied
with all agreements, terms and conditions contained ill this Agreement required
to be performed or complied with by the Company prior to or simultaneously with
the Closing Date.
3. l(d) Adequacy of Collateral. All of the conditions to the
effectiveness of the Collateral Agreement specified in Article XII thereof shall
have occurred and the Administrator shall have confirmed to the Bank pursuant to
Section 3.1(a) thereof that the Collateral Value of the Collateral Pool is
sufficient to secure all of the initial Committed Loan.
3.1(e) Other Matters. A1l corporate and legal proceedings relating
to the Company and all instruments and agreements in connection with the
transactions contemplated by this Agreement shall be satisfactory in scope, form
and substance to the Bank and its counsel, and the Bank shall have received all
information and copies of all documents, including records of corporate
proceedings, which it may reasonably have requested in connection therewith,
such documents where appropriate to be certified by proper corporate or
governmental authorities.
3.1(f) Fees and Expenses. The Bank shall have received all fees and
other amounts due and payable by the Company on or prior to the Closing Date,
including the reasonable fees and expenses of counsel to the Bank payable
pursuant to Section 8.2.
Section 3.2 Conditions Precedent to all Loans. The obligation of the Bank
to make ally Loan hereunder (including the initial Loan) shall be subject to the
fulfillment of the following conditions:
3.2(a) Representations and Warranties. The representations and
warranties contained in Article IV shall be true and correct on and as of the
Loan Date of each Loan, with the same force and effect as if made on such date.
3.2(b) No Default. No Default or Event of Default shall have
occurred and be continuing on the Loan Date of each Loan, will exist after
giving effect to such Loan or is reasonably anticipated to occur.
3.2(c) Loan Request. The Bank shall have received the
Company's request for such Loan as required under Section 2.3.
3.2(d) Adequacy of Collateral. The Administrator shall have
confirmed to the Bank pursuant to Section 3.1(a) of the Collateral Agreement
that the Collateral Value of the Collateral Pool is sufficient to secure all of
such Committed Loan.
3.2(e) Form U-1. The Bank shall have received a properly
completed Form VI (as referred to in Regulation U) duly executed by the
Company if so requested by the Bank.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Bank to enter into this Agreement, to grant the Commitment
and to make Loans hereunder, the Company represents and warrants to the Bank:
Section 4.1 Organization, Standing. Etc. The Company is a corporation duly
incorporated and validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to carry on its business as now conducted, to enter into this
Agreement and to issue the Notes and to perform its obligations under the Loan
Documents. Each Material Subsidiary is a corporation duly incorporated and
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry on
its business as now conducted. Each of the Company and the Material Subsidiaries
(a) holds all certificates of authority, licenses and permits necessary to carry
on its business as presently conducted in each jurisdiction in which it is
carrying on such business, except where the failure to hold such certificates,
licenses or permits would not have a material adverse effect on the business,
operations, property, assets or condition, financial or otherwise, of the
Company and the Material Subsidiaries taken as a whole, and (b) is duly
qualified and in good standing as a foreign corporation in each jurisdiction in
which the character of the properties owned, leased or operated by it or the
business conducted by it makes such qualification necessary and the failure so
to qualify would permanently preclude the Company or such Material Subsidiary
from enforcing its rights with respect to any assets or expose the Company or
such Material Subsidiary to any liability, which in either case would be
material to the Company and the Subsidiaries taken as a whole.
Section 4.2 Authorization and Validity. The execution, delivery and
performance by the Company of the Loan Documents have been duly authorized by
all necessary corporate action by the Company, and this Agreement constitutes,
and the Notes and other Loan Documents when executed will constitute, the legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms subject to limitations as to
enforceability which might result from bankruptcy, insolvency, moratorium and
other similar laws affecting creditors' rights generally and subject to
limitations on the availability of equitable remedies.
Section 4.3 No Conflict; No Default. The execution, delivery and
performance by the Company of the Loan Documents will not (a) violate any
provision of any law, statute, rule or regulation or any order, writ, judgment,
injunction, decree, determination or award of any court, governmental agency or
arbitrator presently in effect having applicability to the Company, (b) violate
or contravene any provision of the Certificate of Incorporation or bylaws of the
Company, or (c) result in a breach of or constitute a default under any
indenture, loan or credit agreement or any other agreement, lease or instrument
to which the Company is a party or by which it or any of its properties may be
bound or result in the creation of any Lien thereunder. Neither the Company nor
any Material Subsidiary is in default under or in violation of any such law,
statute, rule or regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, loan or credit agreement or other
agreement, lease or instrument in any case in which the consequences of such
default or violation could have a material adverse effect on the business,
operations, properties, assets or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole.
Section 4.4 Government Consent. 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 is required on the
part of the Company to authorize, or is required in connection with the
execution, delivery and performance of, or the legality, validity, binding
effect or enforceability of, the Loan Documents, except for any necessary filing
or recordation of or with respect to any of the Security Documents.
Section 4.5 Financial Statements and No Material Adverse Change. The
Company's audited financial statements as at September 30, 1993 and its
unaudited financial statements as at September 30, 1994, as heretofore furnished
to the Bank, have been prepared in accordance with GAAF on a consistent basis
(except for year-end audit adjustments as to the interim statements) and fairly
present the financial condition of the Company as at such dates and the results
of its operations and changes in financial position for the respective periods
then ended. As of the dates of such financial statements, the Company had no
material obligation, contingent liability, liability for taxes or long term
lease obligation which is not reflected in such financial statements or in the
notes thereto, except in connection with the litigation disclosed in Schedule
4.6 hereto or reported to the Bank pursuant to Section 5.9. Since September 30,
1994, there has been no material adverse change in the business, operations,
property, assets or condition, Financial or otherwise, of the Company, except as
disclosed in Schedule 4.5 hereto.
Section 4.6 Litigation.
4.6(a) General Litigation. Except as disclosed on Schedule 4.6
hereto, there are no actions, suits or proceedings pending or, to the knowledge
of the Company, threatened against or affecting the Company or any Subsidiary or
any of their properties before any court or arbitrator, or any Governmental
Authority which has had, or, if determined adversely to the Company or such
Subsidiary, would have, a material adverse effect on the business, operations,
property or condition (financial or otherwise) of the Company and the
Subsidiaries taken as a whole or on the ability of the Company to perform its
obligations under any Loan Document.
4.6(b) Litigation Affecting this Agreement. There are no actions,
suits, arbitrations, investigations or proceedings pending or, to its knowledge,
threatened against the Company before any Governmental Authority or the NYSE or
any other stock or securities or commodities exchange which questions the
validity or enforceability of this Agreement or any action to be taken in
connection with the transactions contemplated hereby.
Section 4.7 ERISA. Each Plan complies with all material applicable
requirements of ERISA and the Code and with all material applicable rulings and
regulations issued under the provisions of ERISA and the Code setting forth
those requirements. No Reportable Event has occurred and is continuing with
respect to any Plan. A1l of the minimum funding standards applicable to such
Plans have been satisfied and there exists no event or condition which would
permit the institution of proceedings to terminate any Plan under Section 4042
of ERISA. The current value of the Plans' benefits guaranteed under Title IV of
ERISA does not exceed the current value of the Plans' assets allocable to such
benefits.
Section 4.8 Margin Regulations. The Company is a broker-dealer subject to
Regulation T. The Company maintains procedures and internal controls reasonably
adapted to ensure that the Company does not extend or maintain credit to or for
its customers other than in accordance with the provisions of Regulation T, and
the activities of employees of the Company to ensure that the Company does not
extend or maintain credit to or for its customers other than in accordance with
the provisions of Regulation T. Neither the mailing of any Loan hereunder, nor
the use of proceeds thereof, will violate or be inconsistent with the provisions
of Regulations T, U or X.
Section 4.9 Title to Property; Liens; Possession Under Leases. Each of the
Company and the Material Subsidiaries has (a) good and marketable title to its
real properties and (b) good and sufficient title to or valid, subsisting and
enforceable leasehold interests in, its other material properties and assets,
including all real properties, other properties and assets, referred to as owned
by the Company and the Subsidiaries in the most recent financial statements
referred to in Section 4.5 (other than property disposed of since the date of
such financial statements in the ordinary course of business).
Section 4.10 Taxes. Each of the Company and the Material Subsidiaries has
filed all federal, state and local tax returns required to be filed and has paid
or made provision for the payment of all taxes due and payable pursuant to such
returns and pursuant to any assessments made against it or any of its property
and all other taxes, fees and other charges imposed on it or any of its property
by any governmental authority (other than taxes, fees or charges the amount or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with GAAP have been
provided on the books of the Company). No tax Liens have been filed and no
material claims are being asserted with respect to any such taxes, fees or
charges. The charges, accruals and reserves on the books of the Company in
respect of taxes and other governmental charges are adequate and the Company
knows of no proposed material tax assessment against it or any Material
Subsidiary or any basis therefor.
Section 4.11 Trademarks. Each of the Company and the Material Subsidiaries
possesses or has the right to use all of the trademarks, trade names, service
marks and copyrights used in or necessary for the conduct of its business,
without known conflict with the rights of others.
Section 4.12 Burdensome Restrictions. Neither the Company nor any Material
Subsidiary is a party to or otherwise bound by any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
charter or corporate restriction which would foreseeably have a material adverse
effect on the business, properties, assets, operations or condition (financial
or otherwise) of the Company or such Material Subsidiary or on the ability of
the Company or any Material Subsidiary to carry out its obligations under any
Loan Document.
Section 4.13 Investment Company Act. Neither the Company nor any
Subsidiary is an "investment company" or a company "controlled" by an investment
company within the meaning of the Investment Company Act of 1940, as amended.
Section 4.14 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
1940, as amended.
Section 4.15 Full Disclosure. Subject to the following sentence, neither
the financial statements referred to in Section 4.5 nor any other certificate,
written statement, exhibit or report furnished by or on behalf of the Company in
connection with or pursuant to this Agreement contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements contained therein not misleading, which has not been corrected by
more current information provided to the Bank by the Company. Certificates or
statements furnished by or on behalf of the Company to the Bank consisting of
projections or forecasts of future results or events have been prepared in good
faith and are based on good faith estimates and assumptions of the management of
the Company, and the Company has no reason to believe that such projections or
forecasts are not reasonable.
Section 4.16 Subsidiaries. The Company has no Subsidiaries other
than the Subsidiaries identified in Schedule 4.16.
Section 4.17 Registered Broker-Dealer; Membership. The Company is duly
registered with the Securities and Exchange Commission as a broker-dealer and is
a member in good standing of the NASD and is a member organization in good
standing of the NYSE.
Section 4.18 SIPC Assessments. The Company is not in arrears with respect
to any assessment made upon it by the SIPC.
Section 4.19 Examining Authority. The NYSE has been designated as
the Examining Authority for the Company.
Section 4.20 Ownership. The Parent owns all (other than
directors' qualifying shares) of the voting shares of the Company.
Section 4.21 Compliance with Laws and Other Agreements. Neither the
Company nor any of its Material Subsidiaries is in default with respect to any
order, writ, injunction or decree of any Governmental Authority or
Self-Regulatory Organization or, to the knowledge of the Company, in violation
of any law, statute, rule or regulation to which the Company or such Material
Subsidiary or ally Property of the Company or any such, Subsidiary is or are
subject, which default or violation could reasonably be expected to have a
material adverse effect on the business, operations, property, assets or
condition, financial or otherwise, of the Company. Without limiting the
foregoing, the Company and each of its Material Subsidiaries is in compliance
with all capital requirements of all Governmental Authorities applicable to the
Company or any such Subsidiary, including, without limitation, Rule 15c3-l.
Neither the Company nor any of its Subsidiaries is in default in the payment or
performance of any of its obligations or in the performance of any mortgage,
indenture, lease, contract or other agreement to which it is a party or by which
it or any of its property is bound, which default could reasonably be expected
to have a material adverse effect on the business, operations, property, assets
or condition, financial or otherwise, of the Company.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitment shall have expired or been terminated and the Notes
and all of the other Obligations shall have been paid ill full, unless the Bank
shall otherwise consent in writing:
Section 5.1 Financial Statements and Reports. The Company will furnish
to the Bank:
5.1(a) As soon as available and in any event within 90 days after
the end of each fiscal year of the Company and the Parent, the financial
statements of the Company, and the consolidated financial statements of the
Parent, consisting of at least statements of income, cash flow, changes in
financial position and stockholders' equity, and a balance sheet as at the end
of such year, setting forth in each case in comparative form corresponding
figures from the previous annual audit, certified without qualification with
respect to whether each of the Company and the Parent is a "going concern" by
Deloitte & Touche or other independent certified public accountants of
recognized national standing selected by the Company and the Parent and
acceptable to the Bank, together with a letter from such accountants addressed
to the Bank (a) acknowledging that the Bank is extending credit ill reliance on
such financial statements and authorizing such reliance and (b) confirming that
no management letter, management report or other supplementary comments or
reports to the Company or the Parent or to either of their boards of directors
furnished by such accountants advised the recipients of the same of any material
weakness.
5.1(b) Together with the audited financial statements required under
Section 5. l (a), a statement by the accounting firm performing such audit to
the effect that it has reviewed this Agreement and that in the course of
performing its examination nothing came to its attention that caused it to
believe that any Default or Event of Default exists, or, if such Default or
Event of Default exists, describing its nature.
5.1(c) As soon as available and in any event within 30 days after
the end of each fiscal month, an unaudited statement of income for the Company
and consolidated and consolidating unaudited statements of income for the Parent
for such month and in each case for the period from the beginning of such fiscal
year to the end of such month, and an unaudited balance sheet of the Company and
unaudited consolidated and consolidating balance sheet of the Parent as at the
end of such month, setting forth in comparative form figures for the
corresponding period for the preceding fiscal year, accompanied by a certificate
signed by the chief financial officer of the Company, in the case of the
Company's statements, and the chief financial officer of the Parent, in the case
of the Parent's statements, stating that such financial statements present
fairly the financial condition of the Company and that the same have been
prepared in accordance with GAAP.
5.1(d) As soon as practicable and in any event within 30 days after
the end of each fiscal month, a statement signed by the chief financial officer
of the Company demonstrating in reasonable detail compliance (or noncompliance,
as the case may be) with Sections 5.12 and 6.9 as at the end of such month and
stating that as at the end of such month there did not exist any Default or
Event of Default or, if such Default or Event of Default existed, specifying the
nature and period of existence thereof and what action the Company proposes to
take with respect thereto.
5.1(e) Promptly upon the filing thereof with NYSE or the Commission,
Part II of the Company's Focus Report, as filed for the most recent quarterly
period for which such report is required to be filed.
5.1(f) Immediately upon the Company obtaining Knowledge of any
Default or Event of Default, a notice describing the nature thereof and what
action the Company proposes to take with respect thereto.
5.1(g) Immediately upon the Company obtaining Knowledge of the
occurrence, with respect to any Plan, of any Reportable Event or any Prohibited
Transaction, a notice specifying the nature thereof and what action the Company
proposes to take with respect thereto, and, when received, copies of any notice
from PBGC of intention to terminate or have a trustee appointed for any Plan.
5.1(h) Promptly upon the mailing or filing thereof, copies of all
financial statements, reports and proxy statements mailed to the Parent's
shareholders; copies of all registration statements, periodic reports and other
documents filed by the Parent with the Commission or any national securities
exchange; and copies of all registration statements relating to the Company's
own securities and of any periodic reports and other documents relating to the
Company's own business filed by the Company with the Commission or any national
securities exchange.
5.1(i) Promptly upon a request, such other information regarding the
business, operation and financial condition of the Company as the Bank may
reasonably request from time to time.
Section 5.2 Corporate Existence. The Company will, and cause each Material
Subsidiary to, (a) maintain its corporate existence in good standing under the
laws of its jurisdiction of incorporation and its qualification to transact
business in each jurisdiction where failure so to qualify would permanently
preclude the Company or such Material Subsidiary from enforcing its rights with
respect to any material asset or would expose the Company or such Material
Subsidiary to any material liability; provided, however, that nothing herein
shall prohibit the merger or liquidation of any Subsidiary allowed under Section
6. l, and (b) do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business.
Section 5.3 Insurance. The Company will maintain, and cause each Material
Subsidiary to maintain, with financially sound and reputable insurance companies
such insurance as may be required by law and such other insurance m such amounts
and against such hazards as is customary in the case of reputable corporations
engaged in the same or similar business and similarly situated.
Section 5.4 Payment of Taxes and Claims. The Company will file, and cause
each Material Subsidiary to file, all tax returns and reports which are required
by law to be filed by it and will pay, and cause each Material Subsidiary to
pay, before they become delinquent, all taxes, assessments and governmental
charges and levies imposed upon it or its property and all claims or demands of
any kind (including those of suppliers, mechanics, carriers, warehousemen,
landlords and other like Persons) which, if unpaid, might result in the creation
of a Lien upon its property; provided that the foregoing items need not be paid
if they are being contested in good faith by appropriate proceedings, and as
long as the Company's or such Subsidiary's title to its property is not
materially adversely affected, its use of such property in the ordinary course
of its business is not materially interfered with and adequate reserves with
respect thereto have been set aside on the Company's or such Subsidiary's books
in accordance with GAAP.
Section 5.5 Inspection. The Company will permit any Person designated by
the Bank to visit and inspect any of the properties, corporate books and
financial records of the Company and the Material Subsidiaries, to examine and
to make copies of the books of accounts and other financial records of the
Company and the Material Subsidiaries, and to discuss the affairs, finances and
accounts of the Company and the Material Subsidiaries with, and to be advised as
to the same by, its officers at such reasonable times and intervals as the Bank
may designate. So long as no Event of Default exists, such visits, inspections
and examinations shall be at the expense of the Bank, but any such visits,
inspections and examinations made while any Event of Default is continuing shall
be at the expense of the Company.
Section 5.6 Maintenance of Properties. The Company will maintain, and
cause each Material Subsidiary to maintain, its properties used or useful in the
conduct of its business in good condition, repair and working order, and
supplied with all necessary equipment, and make all necessary repairs, renewals,
replacements, betterments and improvements thereto, all as may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times.
Section 5.7 Books and Records. The Company will keep, and will cause each
Material Subsidiary to keep, adequate and proper records and books of account in
which full and correct entries will be made of its dealings, business and
affairs.
Section 5.8 Compliance. The Company will comply, and will cause each
Material Subsidiary to comply, in all material respects with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards of or by
any Governmental Authority or Self-Regulatory Organization to which it may be
subject; provided, however, that failure so to comply shall not be a breach of
this covenant if such failure does not have, or is not reasonably expected to
have, a materially adverse effect on the properties, business, prospects or
condition (financial or otherwise) of the Company or such Subsidiary and the
Company or such Subsidiary is acting in good faith and with reasonable dispatch
to cure such noncompliance.
Section 5.9 Notice of Litigation. The Company will give prompt written
notice to the Bank of the commencement of any action, suit or proceeding before
any court or arbitrator or any governmental department, board, agency or other
instrumentality affecting the Company or any Material Subsidiary or any property
of the Company or a Material Subsidiary or to which the Company or a Material
Subsidiary is a party in which an adverse determination or result could have a
material adverse effect (as determined by the Company in the exercise of its
reasonable judgment) on the business, operations, property or condition
(financial or otherwise) of the Company and the Subsidiaries taken as a whole or
on the ability of the Company or any Material Subsidiary to perform its
obligations under this Agreement and the other Loan Documents, stating the
nature and status of such action, suit or proceeding. The Company shall give the
Bank prompt written notice of any decision by the Company, its Parent or an
Affiliate to settle any suit or proceeding, whether now pending or hereafter
commenced, for an amount of $2,000,000 or more; provided, however, that the
Company will provide the amount which it has decided to pay in settlement, and
not any further information concerning the settlement, unless the Bank agrees to
the terms of a written confidentiality agreement on terms acceptable to the
Company.
Section 5.10 ERISA. The Company will maintain, and cause each Material
Subsidiary to maintain, each Plan in compliance with all material applicable
requirements of ERISA and of the Code and with all material applicable rulings
and regulations issued under the provisions of ERISA and of the Code and will
not and not permit any of the ERISA Affiliates to (a) engage in any transaction
in connection with which the Company or any of the ERISA Affiliates would be
subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA
or a tax imposed by Section 4975 of the Code, in either case in an amount
exceeding $1,000,000, (b) fail to make full payment when due of all amounts
which under the provisions of any Plan, the Company or any ERISA Affiliate is
required to pay as contributions thereto, or permit to exist any accumulated
funding deficiency (as such term is defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, with respect to any Plan in an
aggregate amount exceeding $1,000,000 or (c) fail to make any payments in an
aggregate amount exceeding $1,000,000 to any Multiemployer Plan that the Company
or any of the ERISA Affiliates may be required to make under any agreement
relating to such Multiemployer Plan or any law pertaining thereto.
Section 5.11 Broker-Dealer Registration. The Company will maintain its
registration as a broker-dealer with the Commission in full force and effect and
maintain its membership ill good standing in such organizations as are necessary
to enable it to engage in the securities business and take all action necessary
to comply in all material respects with the rules and regulations of such
organizations.
Section 5.12 Net Capital. The Company will maintain at all times Net
Capital of not less than 10% of Aggregate Debit Items as determined as of the
close of each Business Day.
Section 5.13 Leverage Ratio. The Company will maintain at all
times a Leverage Ratio of not more than 5.0 to 1.0.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitment shall have expired or been terminated and the Notes
and all of the other Obligations shall have been paid in full, unless the Bank
shall otherwise consent in writing:
Section 6.1 Merger. The Company will not merge or consolidate or enter
into any analogous reorganization or transaction with any Person or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution) or permit
any Material Subsidiary to do any of the foregoing; provided, however, any
Subsidiary may be merged with or liquidated into the Company or any wholly-owned
Subsidiary (if the Company or such wholly-owned Subsidiary is the surviving
corporation).
Section 6.2 Sale of Assets. The Company will not, and will not permit any
Material Subsidiary to, sell, transfer, lease or otherwise convey all or any
substantial part of its assets except for sales in the ordinary course of
business and except for sales or other transfers by a Subsidiary to the Company
or a wholly-owned Subsidiary.
Section 6.3 Plans. The Company will not permit, and will not allow any
Material Subsidiary to permit, any event to occur or condition to exist which
would permit any Plan to terminate under any circumstances which would cause the
Lien provided for in Section 4068 of ERISA to attach to any assets of the
Company or any Subsidiary; and the Company will not permit the underfunded
amount of Plan benefits guaranteed under Title IV of ERISA to exceed $1,000,000.
Section 6.4 Change in Nature of Business. The Company will not, and will
not permit any Material Subsidiary to, make any material change in the nature of
the business of the Company or such Material Subsidiary, as carried on at the
date hereof.
Section 6.5 Subsidiaries. The cumulative net worth of all Subsidiaries
of the Company shall not exceed $1,000,000 at any time.
Section 6.6 Negative Pledges. The Company will not enter into any
agreement, bond, note or other instrument with or for the benefit of any Person
other than the Bank which would prohibit the Company from granting, or otherwise
limit the ability of the Company to grant, to the Bank any Lien on any assets or
properties of the Company. No grant of security interests to Lenders that are
parties to the Collateral Agreement, whether or not pursuant to the Collateral
Agreement, no loans of securities by the Company in the ordinary course of its
business and no negative pledges with respect to immaterial assets shall be
deemed to violate this Section 6.6.
Section 6.7 Liens. The Company will not create, incur, assume or suffer to
exist any Lien on Pledged Securities other than Liens on Customers' Securities
pursuant to the Collateral Agreement.
Section 6.8 Tangible Net Worth. The Company will not permit its Tangible
Net Worth at any time to be less than $100,000,000.
Section 6.9 Loans, Advances, Investments, Joint Ventures and Contingent
Obligations. The Company, other than in the ordinary course of its broker-dealer
business, will not, and not permit any Material Subsidiary to (x) make or permit
to remain outstanding any loan or advance to any other Person, (y) directly or
indirectly guarantee, endorse, be or become contingently liable for or enter
into any contract which is, in economic effect substantially equivalent to a
guaranty of the obligation of any other Person, or (z) own, purchase or make any
commitment to purchase the securities of any corporation or own, purchase or
make any commitment to purchase for cash or any consideration, any obligations,
other securities, the business or integral part of the business of any other
Person or enter into a joint venture or partnership with any other Person,
except:
(a) by the endorsement of negotiable instruments for deposit or
collection (or similar transactions) in the ordinary course of business;
(b) Producer Loans in an aggregate amount not to exceed
$15,000,000 at any time outstanding;
(c) advances to officers and employees, other than Producer
Loans, in an aggregate amount not to exceed $1,000,000 at any time
outstanding; and
(d) Investments of the type currently held by the Company, as
described on Schedule 6.9 hereto, in an aggregate amount not to exceed
$20,000,000 at any time outstanding.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default. The occurrence of any one or more of
the following events shall constitute an Event of Default:
7.1(a) The Company shall fail to make when due, whether on demand,
by acceleration or otherwise, any payment of principal of or interest on either
Note or any other Obligation required to be made to the Bank pursuant to this
Agreement.
7.1(b) Any representation or warranty made by or on behalf of the
Company, or any Subsidiary in this Agreement or any other Loan Document or by or
on behalf of the Company, or any Subsidiary in any certificate, statement,
report or document herewith or hereafter furnished to the Bank pursuant to this
Agreement or any other Loan Document shall prove to have been false or
misleading in any material respect on the date as of which the facts set forth
are stated or certified.
7.1(c) The Company shall fail to comply with Sections 5.2, 5.3, 5.11
or 5.12 or any Section of Article VI.
7.1(d) The Company shall fail to comply with any other agreement,
covenant, condition, provision or term contained in this Agreement (other than
those hereinabove set forth in this Section 7.1) and such failure to comply
shall continue for three calendar days after whichever of the following dates is
the earliest: (i) the date the Company gives notice of such failure to the Bank,
(ii) the date the Company should have given notice of such failure to the Bank
pursuant to Section 5.1, or (iii) the date the Bank gives notice of such failure
to the Company.
7.1(e) Any default (however denominated or defined) shall occur
under the Collateral Agreement, the Firm Collateral Agreement or any Agreement
to Pledge or any Liquidation Notice shall be provided to the Administrator by
any Lender.
7.1(f) The Company or any Material Subsidiary shall become insolvent
or shall generally not pay its debts as they mature or shall apply for, shall
consent to, or shall acquiesce in the appointment of a custodian, trustee or
receiver of the Company or any Material Subsidiary or for a substantial part of
the property thereof or, in the absence of such application, consent or
acquiescence, a custodian, trustee or receiver shall be appointed for the
Company or any Material Subsidiary or for a substantial part of the property
thereof and shall not be discharged within 45 days, or the Company shall make an
assignment for the benefit of creditors.
7.1(g) Any bankruptcy, reorganization, debt arrangement or other
proceedings under any bankruptcy or insolvency law shall be instituted by or
against the Company or any Material Subsidiary, and if instituted against the
Company or any Material Subsidiary, shall have been consented to or acquiesced
in by the Company or such Material Subsidiary, or shall remain undismissed for
60 days, or an order for relief shall have beet, entered against the Company or
such Subsidiary.
7. l(h) Any dissolution or liquidation proceeding not permitted by
Section 6.l shall be instituted by or against the Company or any Material
Subsidiary and, if instituted against the Company or ally Material Subsidiary,
shall be consented to or acquiesced in by the Company or such Material
Subsidiary or shall remain for 45 days undismissed.
7.1(i) A judgment or judgments for the payment of money in excess of
the sum of $10,000,000 in the aggregate shall be rendered against the Company or
a Material Subsidiary and the Company or such Subsidiary shall not discharge the
same or provide for its discharge in accordance with its terms, or procure a
stay of execution thereof prior to any execution on such judgment by such
judgment creditor, within 60 days from the date of entry thereof, and within
said period of 60 days, or such longer period during which execution of such
judgment shall be stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal.
7.1(j) The maturity of any material Indebtedness of the Company
(other than Indebtedness under this Agreement) or a Material Subsidiary shall be
accelerated, or the Company or a Material Subsidiary shall fail to pay any such
material Indebtedness when due (after the lapse of any applicable grace period)
or, in the case of such Indebtedness payable on demand, when demanded (after the
lapse of any applicable grace period), or any event shall occur or condition
shall exist and shall continue for more than the period of grace, if ally,
applicable thereto and shall have the effect of causing, or permitting the
holder of any such Indebtedness or any trustee or other Person acting on behalf
of such holder to cause, such material Indebtedness to become due prior to its
stated maturity or to realize upon any collateral given as security therefor.
For purposes of this Section, Indebtedness of the Company or a Material
Subsidiary shall be determined "material" if it exceeds $10,000,000 as to any
item of Indebtedness or in the aggregate for all items of Indebtedness with
respect to which any of the events described in this Section 7.1(j) has
occurred.
7.1(k) Any execution or attachment shall be issued whereby any
substantial part of the property of the Company or any Material Subsidiary shall
be taken or attempted to be taken and the same shall not have been vacated or
stayed within 30 days after the issuance thereof.
7.1(l) Any Official Lien on all or a portion of the Pledged
Securities shall have been created and such Official Lien shall not have been
discharged, released or bonded (with property other than the Pledged Securities)
within 30 days of such creation.
7.1(m) The Collateral Agreement, the Firm Collateral Agreement or
any Agreement to Pledge shall, at any time, cease to be in full force and effect
or shall be judicially declared null and void, or the validity or enforceability
thereof shall be contested by the Company, or the Bank shall cease to have a
valid and perfected security interest having the priority contemplated
thereunder in all of the collateral described therein.
7.1(n) Any Change of Control shall occur.
7.1(o) Any Self-Regulatory Organization shall revoke the Company's
membership therein or shall suspend such membership and such membership shall
not be reinstated within 10 days of such suspension if, in the case of any
Self-Regulatory Organization other than the NYSE and the NASD, such revocation
or suspension could reasonably be expected to leave a Material Adverse Effect.
7.1(p) The DTC or PTC shall revoke the Company's membership therein
or shall suspend such membership and such membership shall not be reinstated
within 10 days of such suspension.
7.1(q) The Commission shall revoke the Company's status as a
broker-dealer or shall suspend such status and such status shall not be
reinstated within 10 days of such suspension.
7.1(r) The SIPC shall have applied or shall have announced its
intention to apply for a decree adjudicating that customers of the Company are
in need of protection under SIPA.
7.1(s) The Parent shall fail to maintain at all times
Tangible Net Worth of $125,000,000.
Section 7.2 Remedies. If (a) any Event of Default described in Sections
7.1(f), (g) or (h) shall occur with respect to the Company, the Commitment shall
automatically terminate and the Obligations shall automatically become
immediately due and payable, or (b) any other Event of Default shall occur and
be continuing, then the Bank may (i) declare the Commitment terminated,
whereupon the Commitment shall terminate, (ii) declare the Obligations to be
forthwith due and payable, whereupon the Obligations shall immediately become
due and payable, in each case without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived, anything in this
Agreement or in the Notes to the contrary notwithstanding, (iii) exercise all
rights and remedies under any of the other Loan Documents, and (iv) enforce all
rights and remedies under any applicable law.
Section 7.3 Offset. In addition to the remedies set forth in Section 7.2,
upon the occurrence of any Event of Default and thereafter while the same be
continuing, the Company hereby irrevocably authorizes the Bank to set off the
Obligations against all deposits and credits (other than with respect to the
Special Reserve Account) of the Company with, and any and all claims of the
Company against, the Bank. Such right shall exist whether or not the Bank shall
have made any demand hereunder or under any other Loan Document, whether or not
the Obligations, or any part thereof, or deposits and credits held for the
account of the Company is or are matured or unmatured, and regardless of the
existence or adequacy of any collateral, guaranty or any other security, right
or remedy available to the Bank. The Bank agrees that, as promptly as is
reasonably possible after the exercise of ally such setoff right, it shall
notify the Company of its exercise of such setoff right; provided, however, that
the failure of the Bank to provide such notice shall not affect the validity of
the exercise of such setoff rights. Nothing in this Agreement shall be deemed a
waiver or prohibition of or restriction on the Bank to all rights of banker's
Lien, setoff and counterclaim available pursuant to law.
ARTICLE VIII
MISCELLANEOUS
Section 8. l Modifications. Notwithstanding any provisions to the contrary
herein. any term of this Agreement may be amended with the written consent of
the Company; provided that no amendment, modification or waiver of any provision
of this Agreement or consent to any departure by the Company therefrom shall in
any event be effective unless the same shall be in writing and signed by the
Bank, and then such amendment, modifications, waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Section 8.2 Costs and Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company agrees to reimburse the Bank
upon demand for all reasonable out-of-pocket expenses paid or incurred by the
Bank (including filing and recording costs and fees and expenses of Xxxxx, Xxxxx
& Xxxxx, counsel to the Bank) in connection with the negotiation, preparation,
approval, review, execution, delivery, amendment, modification, interpretation,
collection and enforcement of this Agreement, the Notes and any other Loan
Documents and any commitment letters relating thereto. The Bank is authorized by
the Company to make a Loan to the Company under this Agreement (as a Federal
Funds Rate Advance) in the amount of any such expenses and to apply the proceeds
of such Loan to the payment of such expenses. The obligations of the Company
under this Section shall survive any termination of this Agreement.
Section 8.3 Waivers. etc. No failure on the part of the Bank or any holder
of a Note to exercise and no delay in exercising any power or right hereunder or
under any other Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any power or right or any abandonment or
discontinuance of the enforcement thereof preclude any other or further exercise
thereof or the exercise of any other power or right. The rights and remedies of
the Bank hereunder and under the other Loan Documents are cumulative and not
exclusive of any right or remedy the Bank otherwise has.
Section 8.4 Notices. Except when telephonic notice is expressly authorized
by this Agreement, any notice or other communication to any party in connection
with this Agreement shall be in writing and shall be sent by manual delivery,
telegram, telex, facsimile transmission, overnight courier or United States mail
(postage prepaid) addressed to such party at the address specified oil the
signature page hereof, or at such other address as such party shall have
specified to the other party hereto in writing. All periods of notice shall be
measured from the date of delivery thereof if manually delivered, from the date
of sending thereof if sent by telegram, telex or facsimile transmission, from
the first Business Day after the date of sending if sent by overnight courier,
or from four days after the date of mailing if mailed; provided, however, that
any notice to the Bank under Article II hereof shall be deemed to have been
given only when received by the Bank.
Section 8.5 Taxes. The Company agrees to pay, and save the Bank harmless
from all liability for, any stamp or other taxes which may be payable with
respect to the execution or delivery of this Agreement or the issuance of the
Note, which obligation of the Company shall survive the termination of this
Agreement.
Section 8.6 Successors and Assigns; Disposition of Loans; Transferees.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Company may
not assign its rights or delegate its obligations hereunder or under any other
Loan Document without the prior written consent of the Bank. The Bank may at any
time sell, assign, transfer, grant participations in, or otherwise dispose of
any portion of the Commitment, the Loans and/or Advances (each such interest so
disposed of being herein called a "Transferred Interest") to banks or other
financial institutions ("Transferees"). The Company agrees that each Transferee
shall be entitled to the benefits of Sections 2.16, 2.17, 2.18, 2.19 and 8.2
with respect to its Transferred Interest and that each Transferee may exercise
any and all rights of banker's Lien, setoff and counterclaim as if such
Transferee were a direct lender to the Company. If the Bank makes any assignment
to a Transferee, then upon notice to the Company such Transferee, to the extent
of such assignment (unless otherwise provided therein) shall become a "Bank"
hereunder and shall have all the rights and obligations of the Bank hereunder
and the Bank shall be released from its duties and obligations under this
Agreement to the extent of such assignment. Notwithstanding the sale by the Bank
of any participation hereunder, (a) no participant shall be deemed to be or have
the rights and obligations of the Bank hereunder except that any participant
shall have a right of setoff under Section 7.3 as if it were the Bank and the
amount of its participation were owing directly to such participant by the
Company and (b) the Bank shall not in connection with selling any such
participation condition the Bank's rights in connection with consenting to
amendments or granting waivers concerning any matter under any Loan Document
upon obtaining the consent of such participant other than on matters relating to
(i) any reduction in the amount of any principal of, or the amount of or rate of
interest on, the Notes or any Advance, (ii) any postponement of the date fixed
for any payment of principal of or interest on the Notes or any Loan, or (iii)
the release or subordination of any material portion of any collateral other
than pursuant to the terms of the Collateral Agreement, the Firm Collateral
Agreement or an Agreement to Pledge.
Section 8.7 Confidentiality of Information. The Bank shall use reasonable
efforts to assure that information about the Company and its operations, affairs
and financial condition, not generally disclosed to the public or to trade and
other creditors, which is furnished to the Bank pursuant to the provisions
hereof is used only for the purposes of this Agreement and any other
relationships between the Bank and the Company and shall not be divulged to any
Person other than the Bank, its Affiliates and their respective officers,
directors, employees and agents, except: (a) to its attorneys and accountants,
(b) in connection with the enforcement of the rights of the Bank hereunder and
under the Notes, the Collateral Agreement, the Firm Collateral Agreement or
otherwise in connection with applicable litigation, (c) in connection with
assignments arid participations and the solicitation of prospective assignees
and participants referred to in Section 8.6, and (d) as may otherwise be
required or requested by any regulatory authority having jurisdiction over the
Bank or as required by any applicable law, rule, regulation or judicial process,
the opinion of the Bank's counsel concerning the mailing of such disclosure to
be binding on the parties hereto. The Bank shall not incur any liability to the
Company by reason of any disclosure permitted by this Section 8.7.
Section 8.8 Governing Law and Construction. THE VALIDITY, CONSTRUCTION AND
ENFORCEABILITY OF THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS
PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES
APPLICABLE TO NATIONAL BANKS. Whenever possible, each provision of this
Agreement and the other Loan Documents and any other statement, instrument or
transaction contemplated hereby or thereby or relating hereto or thereto shall
be interpreted in such manner as to be effective and valid under law applicable
thereto, but, if any provision of this Agreement, the other Loan Documents or
any other statement, instrument or transaction contemplated hereby or thereby or
relating hereto or thereto shall be held to be prohibited or invalid under law
applicable thereto or in ally other jurisdiction, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement, the other Loan Documents or any other statement, instrument or
transaction contemplated hereby or thereby or relating hereto or thereto.
Section 8.9 Consent to Jurisdiction. AT THE OPTION OF THE BANK, THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE ENFORCED IN ANY FEDERAL COURT OR
MINNESOTA STATE COURT SITTING IN MINNEAPOLIS OR ST. XXXX, MINNESOTA OR IN ANY
ILLINOIS STATE OR FEDERAL COURT SITTING IN CHICAGO, ILLINOIS; AND THE COMPANY
CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT
THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE COMPANY COMMENCES
ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY
ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT,
THE BANK AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF
THE JURISDICTIONS AND VENUES ABOVE DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.
Section 8.10 Waiver of Jury Trial. EACH OF THE COMPANY AND THE BANK HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY
HERETO. EACH FARM HERETO ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE BANK IN ENTERING INTO THIS AGREEMENT.
Section 8.11 Survival of Agreement. All representations, warranties,
covenants and agreements made by the Company herein or in the other Loan
Documents and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be deemed to have been relied upon by the Bank and shall survive the making of
the Loans by the Bank and the execution and delivery to the Bank by the Company
of the Notes, regardless of any investigation made by or on behalf of the Bank,
and shall continue in full force and effect as long as any Obligation is
outstanding and unpaid and so long as the Commitment has not been terminated;
provided, however, that the obligations of the Company under Sections 2.16,
2.17, 2.18, 8.2, 8.5 and 8.12 shall survive payment in full of the Obligations
and the termination of the Commitment.
Section 8.12 Indemnification. The Company hereby agrees to defend,
protect, indemnify and hold harmless the Bank and its Affiliates and the
directors, officers, employees, attorneys and agents of the Bank and its
Affiliates (each of the foregoing being an "Indemnitee" and all of the foregoing
being collectively the "Indemnitees") from and against any and all claims,
actions, damages, liabilities, judgments, costs and expenses (including all
reasonable fees and disbursements of counsel which may be incurred in the
investigation or defense of any matter) imposed upon, incurred by or asserted
against any Indemnitee, whether direct, indirect or consequential and whether
based on any federal, state, local or foreign laws or regulations (including
securities laws, environmental laws, commercial laws and regulations), under
common law or on equitable cause, or on contract or otherwise:
(a) by reason of, relating to or in connection with the execution,
delivery, performance or enforcement of any Loan Document, any commitments
relating thereto, or any transaction contemplated by any Loan Document; or
(b) by reason of, relating to or in connection with any credit extended or
used under the Loan Documents or any act done or omitted by any Person, or
the exercise of any rights or remedies thereunder, including the
acquisition of any collateral by the Bank by way of foreclosure of the
Lien thereon, deed or xxxx of sale in lieu of such foreclosure or
otherwise;
provided, however, that the Company shall not be liable to any Indemnitee for
any portion of such claims, damages, liabilities and expenses resulting from
such Indemnitee's gross negligence or willful misconduct. In the event this
indemnity is unenforceable as a matter of law as to a particular matter or
consequence referred to herein, it shall be enforceable to the full extent
permitted by law.
This indemnification applies, without limitation, to any act, omission,
event or circumstance existing or occurring on or prior to the later of the
Termination Date or the date of payment in full of the Obligations, including
specifically Obligations arising under clause (b) of this Section. The
indemnification provisions set forth above shall be in addition to any liability
the Company may otherwise have. Without prejudice to the survival of any other
obligation of the Company hereunder the indemnities and obligations of the
Company contained in this Section shall survive the payment in full of the other
Obligations.
Section 8.13 Captions. The captions or headings herein and any table of
contents hereto are for convenience only and in no way define, limit or describe
the scope or intent of any provision of this Agreement.
Section 8.14 Entire Agreement: No Third Party Beneficiaries. This
Agreement and the other Loan Documents embody the entire agreement and
understanding between the Company and the Bank with respect to the subject
matter hereof and thereof. This Agreement supersedes all prior agreements and
understandings relating to the subject matter hereof. Nothing contained in this
Agreement or in any other Loan Document, expressed or implied, is intended to
confer upon any Person other than the parties hereto and thereto any rights,
remedies, obligations or liabilities hereunder or thereunder.
Section 8.15 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and either of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 8.16 Company Acknowledgments. The Company hereby acknowledges that
(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents, (b) the Bank has no fiduciary
relationship to the Company, the relationship being solely that of borrower and
lender, (c) no joint venture exists between the Company and the Bank, and (d)
the Bank undertakes no responsibility to the Company to review or inform the
Company of any matter in connection with any phase of the business or operations
of the Company and the Company shall rely entirely upon its own judgment with
respect to its business, and any review, inspection or supervision of, or
information supplied to, the Company by the Bank is for the protection of the
Bank and neither the Company nor any third party is entitled to rely thereon.
Section 8.17 Subsidiary Reference. Any reference herein to a Subsidiary or
Subsidiaries of the Company and any financial definition, ratio, restriction or
other provision of this Agreement which is stated to be applicable to "the
Company" and the Subsidiaries or which is to be determined on a "consolidated"
or "consolidating" basis, shall apply only to the extent the Company has any
Subsidiaries and. where applicable, to the extent any such Subsidiaries are
consolidated with the Company for financial reporting purposes. References to a
Subsidiary or Subsidiaries shall not be construed as constituting a consent to
the existence, creation or acquisition of any Subsidiary.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
XXXXX XXXXXXX INC.
By /s/ Xxxxxxx X. Xxxxxxx
Print Name Xxxxxxx X. Xxxxxxx
Title Chief Financial Officer
Xxxxx Xxxxxxx Tower, 16th Floor
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Fax (000) 000-0000
THE NORTHERN TRUST COMPANY
By /s/ Xxxxx X'Xxxxx
Print Name Xxxxx X'Xxxxx
Title Senior Vice President
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax (000) 000-0000
