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AMENDED AND RESTATED
REVOLVING CREDIT AND
TERM LOAN AGREEMENT
Dated as of February 28, 1996
BY AND AMONG
XXXXX PRODUCTS COMPANY
as Borrower,
THE BANKS NAMED HEREIN,
as Banks,
and
MERCANTILE BANK OF ST. LOUIS
NATIONAL ASSOCIATION,
as Agent
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TABLE OF CONTENTS
PAGE
SECTION 1. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3. THE REVOLVING CREDIT LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.1 Revolving Credit Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.2 The Swing Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.3 Method of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.4 Revolving Credit Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.5 Termination or Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.6 Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.7 Swing Loan Settlement After Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.1 Letter of Credit Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.2 Participation by Other Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.3 Replacement or Collateralization of Letters of Credit . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5. THE TERM LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.1 Commitment of the Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.2 Term Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.3 Mandatory Prepayments From Excess Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.4 Mandatory Prepayment From Equity Offerings . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6. GENERAL PROVISIONS FOR ALL LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.1 Duration of Interest Periods and Selection of Interest Rates . . . . . . . . . . . . . . . . . 33
6.2 Interest Rates; Interest Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.4 Early Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.5 General Provisions as to Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.6 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.7 Basis for Determining Interest Rate Inadequate or Unfair . . . . . . . . . . . . . . . . . . . 37
6.8 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.9 Increased Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.10 Base Rate Loans Substituted for Affected LIBOR Loans . . . . . . . . . . . . . . . . . . . . . 39
6.11 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.12 Survival of Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.13 Discretion of Bank as to Manner of Funding . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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6.14 Late Payment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.15 Fixed Rate Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.16 Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7. PRECONDITIONS TO LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.1 Term Loan, Initial Revolving Credit Loan, Initial Swing Loan or Letter of Credit . . . . . . . 41
7.2 All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.3 All Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 8. COLLATERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.1 Deeds of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.2 Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.3 Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.4 Collateral Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 9. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.1 Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.2 Corporate Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.3 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.6 Pension and Welfare Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.7 Tax Returns and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.8 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.9 Compliance With Other Instruments; None Burdensome . . . . . . . . . . . . . . . . . . . . . . 50
9.10 Other Debt, Guarantees, Capitalized Leases and Operating Leases . . . . . . . . . . . . . . . . 50
9.11 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.12 Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.13 Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.14 Multi-Employer Pension Plan Amendments Act of 1980 . . . . . . . . . . . . . . . . . . . . . . 51
9.15 Investment Company Act of 1940; Public Utility Holding Company Act of 1935 . . . . . . . . . . 51
9.16 Patents, Licenses, Trademarks, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.17 Environmental and Safety and Health Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.18 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.19 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.20 Employment and Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.21 Government Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.22 Purchase and Other Commitments and Outstanding Bids . . . . . . . . . . . . . . . . . . . . . . 53
9.23 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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SECTION 10. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
10.1 Affirmative Covenants of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(a) Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(b) Payment of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(c) Maintenance of Books and Records; Consultations and Inspections . . . . . . . . . . . 56
(d) Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
(e) Payment of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(f) Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(g) Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(h) Compliance with Laws, Regulations, Et . . . . . . . . . . . . . . . . . . . . . . . . . 57
(i) Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(j) ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
(k) Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
(l) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
(m) Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(n) Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(o) Accountant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(p) Prepayment of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(q) Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
10.2 Negative Covenants of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(a) Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(b) Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
(c) Consolidation, Merger, Sale of Assets, Dissolution, Et . . . . . . . . . . . . . . . . 63
(d) Sale and Leaseback Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
(e) Sale or Discount of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
(f) Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
(g) Changes in Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(h) Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(i) Stock Redemptions and Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(j) Non-Management Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(k) Ownership Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
(l) Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
(m) Change in Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
(n) Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
(o) Limitations on Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
(p) Restricted Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
(q) Ownership of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.3 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 11. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 12. AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
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12.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
12.2 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
12.3 General Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
12.4 No Responsibility for Loans, Recitals, etc . . . . . . . . . . . . . . . . . . . . . . . . . . 71
12.5 Right to Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
12.6 Action Upon Instructions of Required Banks . . . . . . . . . . . . . . . . . . . . . . . . . . 72
12.7 Reliance on Documents; Employment of Agents and Counsel . . . . . . . . . . . . . . . . . . . . 73
12.8 May Treat Payee as Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.9 Agent's Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.10 Rights as a Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.11 Independent Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.12 Resignation of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.13 Removal of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
12.14 Duration of Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 13. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
13.1 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
13.2 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
13.3 Cost and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
13.4 Environmental Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
13.5 General Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
13.6 Authority to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
13.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
13.8 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . 77
13.9 Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
13.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
13.11 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
13.12 References; Headings for Convenience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
13.13 Subsidiary Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
13.14 Successors and Assigns; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
13.15 Assignment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
13.16 Binding Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
13.17 NO ORAL AGREEMENTS; ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
13.18 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
13.19 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
13.20 Resurrection of Borrower's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
13.21 Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SCHEDULES
8.1 Real Property Not subject to Deed of Trust at Closing
9.5 Litigation
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9.6 Pension and Welfare Plans
9.7 Tax Returns and Payments
9.8 Subsidiaries
9.10 Other Debt, Guarantees, Capitalized Leases and Operating Leases
9.11 Unaccrued Wage, Insurance and Benefit Claims
9.16 Patents, Trademarks and Copyrights
9.17 Environmental and Health and Safety Matters
9.18 Existing Investments
9.20 Existing Employment and Other Agreements
10.2(b) Permitted Liens
EXHIBITS
A Revolving Credit Note
B Swing Line Note
C Term Loan Promissory Note
D Letter of Credit Request
E Form of Standby Letter of Credit Application
F Form of Commercial Letter of Credit Application
G Letter of Credit Participation Certificate
H Forms of Legal Opinions
I Compliance Certificate
J Assignment and Assumption Agreement
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AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT
THIS AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN
AGREEMENT (this "Agreement") is made and entered into this 28th day of
February, 1996, by and among XXXXX PRODUCTS COMPANY, a Delaware corporation
(formerly known as DPC Transition Corp.) ("Borrower"), and the undersigned
Banks, including Mercantile Bank of St. Louis National Association in its
capacity as a Bank hereunder and as agent for the Banks under this Agreement.
WITNESSETH:
WHEREAS, Borrower has previously applied for and received a
revolving credit facility from the Banks for revolving credit loans and letters
of credit in an aggregate amount of up to Twenty-Five Million Dollars
($25,000,000.00), and a swing line available thereunder from Mercantile in the
maximum principal amount of $4,000,000.00 pursuant to a certain Revolving
Credit and Term Loan Agreement dated as of October 5, 1995 made by and among
the Borrower, the Agent and the Banks (the "Prior Agreement"); and
WHEREAS, Borrower has further applied for and received a term
loan facility from the Banks in an aggregate amount of up to Ninety Million
Dollars ($90,000,000.00), Eighty-Six Million Two Hundred Seventy-Four Thousand
Two Hundred Thirty-Nine and 31/100 Dollars ($86,274,239.31) of which has been
funded as of the date hereof, and the remainder of which must be funded on or
before October 1, 1996 pursuant to the terms set forth in the Prior Agreement;
and
WHEREAS, Borrower has requested that it be allowed to incur
certain unsecured indebtedness in a principal amount of up to One Hundred Sixty
Million Dollars ($160,000,000.00) to replace its existing subordinate
indebtedness in a present outstanding principal amount of One Hundred Twenty
Million Dollars ($120,000,000.00) and to prepay Thirty Million Dollars
($30,000,000.00) on Borrower's term loan outstanding under the Prior Agreement,
and that certain other revisions be made to the terms of the Prior Agreement;
and
WHEREAS, the Agent and the Banks are willing to make such
amendments and permit Borrower to incur such unsecured indebtedness in place of
such subordinate indebtedness provided certain additional revisions to the
covenants and other terms of the Prior Agreement are made; and
WHEREAS, the Banks are willing to amend, restate and continue
said revolving credit facility and said term loan under the Prior Agreement
with Borrower upon, and subject to, the terms, provisions and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby mutually promise and agree as
follows:
8
SECTION 1. TERM.
The "Term" of this Agreement shall commence on the date hereof
and shall end on September 30, 2000, unless earlier terminated pursuant to the
terms hereof.
SECTION 2. DEFINITIONS.
2.1 Definitions. In addition to the terms defined
elsewhere in this Agreement or in any Exhibit or Schedule hereto, when used in
this Agreement, the following terms shall have the following meanings (such
meanings shall be equally applicable to the singular and plural forms of the
terms used, as the context requires):
Acceptable Acquisition shall mean any Acquisition which has
been: (a) in the event a corporation is the subject of such Acquisition,
either (i) approved by the Board of Directors of the corporation which is the
subject of such Acquisition or (ii) recommended by such Board of Directors to
the shareholders of such corporation, (b) in the event a partnership is the
subject of such Acquisition, approved by a majority (by percentage of voting
power) of the partners of the partnership which is the subject of such
Acquisition, (c) in the event an organization or entity other than a
corporation or partnership is the subject of such Acquisition, approved by a
majority (by percentage of voting power) of the governing body, if any, or by a
majority (by percentage of ownership interest) of the owners of the
organization or entity which is the subject of such Acquisition or (d) in the
event the corporation, partnership or other organization or entity which is the
subject of such Acquisition is in bankruptcy, approved by the bankruptcy court
or another court of competent jurisdiction, provided, however, that no such
Acquisition shall be an Acceptable Acquisition unless: (x) both as of the date
of any such Acquisition and immediately following such Acquisition Borrower is,
and on a pro forma basis projects that it will continue to be, in compliance
with the terms, covenants and conditions contained in this Agreement and the
other Transaction Documents, and (y) immediately following payment of the
consideration for such Acquisition and all costs, fees and expenses associated
therewith, Borrower would have total unborrowed available Revolving Credit
Commitments from the Banks hereunder in an amount not less than $2,500,000.00.
Acquired Company shall mean the Delaware corporation formerly
known as Xxxxx Products Company, which was acquired and into which Borrower's
former Subsidiary, DPC Subsidiary Acquisition Corp., was merged and which was
subsequently merged into Borrower all pursuant to two certain Agreements and
Plans of Merger dated August 31, 1995.
Acquisition shall mean any transaction or series of related
transactions, consummated on or after the date of this Agreement, by which
Borrower or any of its Subsidiaries (a) acquires any going business or all or
substantially all of the assets of any corporation, partnership or other
organization or entity, whether through purchase of assets, merger or otherwise
or (b) directly or indirectly acquires (in one transaction or as of the most
recent transaction in a series of transactions) at least (i) a majority (in
number of votes) of the stock and/or other securities of a corporation having
ordinary voting power for the election of directors (other than stock
and/or other securities having such power only by reason of the
happening of a contingency), (ii) a majority (by percentage of voting power) of
the
- 2 -
9
outstanding partnership interests of a partnership or (iii) a majority of the
ownership interests in any organization or entity other than a corporation or
partnership.
Adjusted Consolidated Working Capital means the Current Assets
of Borrower and its Subsidiaries determined on a consolidated basis, less the
Current Liabilities (but excluding therefrom all Consolidated Current Funded
Debt) of Borrower and its Subsidiaries determined on a consolidated basis.
Affiliate shall mean any Person (a) which directly or
indirectly through one or more intermediaries controls, is controlled by or is
under common control with Borrower or any Subsidiary or Unrestricted
Subsidiary, (b) which beneficially owns or holds or has the power to direct the
voting power of twenty percent (20%) or more of any class of capital stock of
Borrower or any Subsidiary, (c) which has twenty percent (20%) or more of any
class of its capital stock (or, in the case of a Person which is not a
corporation, twenty percent (20%) or more of its equity interest) beneficially
owned or held, directly or indirectly, by Borrower or any Subsidiary or
Unrestricted Subsidiary, or (d) who is a director, officer or employee of
Borrower or any Subsidiary or Unrestricted Subsidiary. For purposes of this
definition, "control" shall mean the power to direct the management and
policies of a Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise.
Agent shall mean Mercantile Bank of St. Louis National
Association in its capacity as agent for the Banks hereunder and its successors
in such capacity.
Amendment to Collateral Assignment shall mean that certain
Amendment to Collateral Assignment described in Section 8.4 herein, dated of
even date herewith, as the same may be amended from time to time.
Amendment to Pledge Agreement shall mean that certain
Amendment to General Pledge and Security Agreement described in Section 8.3
herein, dated of even date herewith, as the same may be amended from time to
time.
Amendment to Security Agreement shall mean that certain
Amendment to Security Agreement described in Section 8.2 herein, dated of even
date herewith, as the same may be amended from time to time.
Amendments to Deeds of Trust shall mean each of those certain
Amendments to Deed of Trust and Security Agreement and those certain Amendments
to Mortgage and Security Agreement described in Section 8.1 herein, dated of
even date herewith, as the same may be amended from time to time.
Applicable Margin shall mean, with respect to each type of
Loan, the rate of interest shown in the applicable column below for the type of
Loan specified for each such column:
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00
Xxxxx X Xxxxx XX Xxxxx XXX Level IV Level V Level VI
--------------- ---------------- ---------------- --------------- --------------- --------------
IF RATIO OF CONSOLIDATED Greater than or Less than 4.65 Less than 4.35 Less than 4.05 Less than 3.75 Less than 3.45
TOTAL DEBT TO CONSOLIDATED equal to 4.65 Greater than Greater than Greater than Greater than
EBITDA IS or equal to 4.35 or equal to 4.05 or equal to 3.75 or equal to 3.45
LIBOR Loans 2.75% 2.50% 2.25% 2.00% 1.75% 1.50%
Base Rate Loans 1.50% 1.25% 1.00% 0.75% 0.50% 0.25%
Notwithstanding the above, the Applicable Margins applicable to each fiscal
quarter during the period through and including the fiscal quarter ending
September 30, 1996 shall not fall below "Level II" even if the ratio of
Consolidated Total Debt to Consolidated EBITDA for the twelve months ending on
any such fiscal quarter is less than 4.35 to 1.0; provided, however, that any
such change in the Applicable Margins shall be effective as of the date the
Agent notifies the Borrower and the Banks of the calculation of Borrower's
ratio of Consolidated Total Debt to Consolidated EBITDA as of such fiscal
quarter-end following delivery to Agent and the Banks of Borrower's financial
statements for such fiscal quarter-end pursuant to Section 10.1(a)(i) or (ii)
herein, and such new Applicable Margins shall continue in effect until the next
such adjustment. Commencing with the quarter ending December 31, 1996 and as
of the last day of each fiscal quarter thereafter, the ratio of Consolidated
Total Debt to Consolidated EBITDA for the twelve months then ending shall be
computed in accordance with Section 10.1(m)(iii) and the Applicable Margins
adjusted in accordance with all of the levels set forth above, provided again
that any such change in the Applicable Margins shall be effective as of the
date the Agent notifies the Borrower and the Banks of the calculation of
Borrower's ratio of Consolidated Total Debt to Consolidated EBITDA as of such
fiscal quarter-end following delivery to Agent and the Banks of Borrower's
financial statements for such fiscal quarter-end pursuant to Section 10.1(a)(i)
or (ii) herein, and such new Applicable Margins shall continue in effect until
the next such adjustment. Each determination by the Agent of the Applicable
Margins shall be deemed prima facie correct.
Assignment Agreement shall mean any of those certain
Assignment Agreements described in Section 13.15 herein.
Attorneys' Fees shall mean (i) the reasonable value of the
services (and costs, charges and expenses related thereto) of all attorneys and
paralegals employed by the Agent (including, without limitation, attorneys and
paralegals who are employees of the Agent or are employees of any affiliate of
the Agent) from time to time (a) in connection with the negotiation,
preparation, execution, delivery, amendment, modification, extension, renewal
and/or enforcement of this Agreement and/or any of the other Transaction
Documents, and/or (b) in connection with the preparation, negotiation or
execution of any waiver or consent with respect to this Agreement or any of the
other Transaction Documents, and (ii) the reasonable value of the services (and
costs, charges and expenses related thereto) of all attorneys and paralegals
employed by the Agent or any of the Banks (including, without limitation,
attorneys and paralegals who are employees of the Agent or any of the Banks or
are employees of any affiliate of the Agent or any of the Banks) from time to
time (a) in connection with any Default or Event of Default under this
Agreement, (b) to represent the Agent or any of the Banks in any litigation,
contest, dispute, suit or proceeding, or to commence, defend or intervene in
any litigation, contest, dispute, suit or proceeding, or to file any petition,
complaint, answer, motion
- 4 -
11
or other pleading or to take any other action in or with respect to any
litigation, contest, dispute, suit or proceeding (whether instituted by the
Agent, any of the Banks, Borrower or any other Person and whether in bankruptcy
or otherwise) in any way or respect relating to this Agreement or any of the
other Transaction Documents (but excluding such matters relating solely to
disputes among the Banks and/or the Banks and Agent), Borrower, any Subsidiary
or any other Obligor and/or (c) to enforce any of the rights and/or remedies of
the Agent or any of the Banks to collect any of Borrower's Obligations.
Bank(s) shall mean each bank listed on the signature pages
hereof, and its successors and assigns.
Base Rate shall mean the interest rate per annum determined on
any day as the sum of: (a) the greater of: (i) the Prime Rate then in effect,
or (ii) the Fed Funds Rate then in effect plus One-Half of One Percent (.50%);
and (b) the Applicable Margin for Base Rate Loans then in effect.
Base Rate Loan shall mean any Loan bearing interest at the Base Rate.
BOK shall mean Bank of Oklahoma, N.A., and its successors and assigns.
Bond Letter of Credit shall mean that certain direct pay
Letter of Credit issued by Mercantile as credit enhancement for those certain
Industrial Revenue Bonds (The Xxxxx Products Company Project) Series 1991
issued by the County of Pueblo, Colorado pursuant to Section 4.1(a) herein.
Borrower's Obligations shall mean any and all present and
future indebtedness (principal, interest, fees, collection costs and expenses,
Attorneys' Fees and other amounts), liabilities and obligations (including,
without limitation, reimbursement obligations with respect to standby and
commercial letters of credit issued by Mercantile under this Agreement for the
account of Borrower) of Borrower to the Agent and/or any one or more of the
Banks evidenced by or arising under this Agreement, the Notes, the Letter of
Credit Application(s), the Deeds of Trust, the Security Agreement, the
Collateral Assignment and/or any of the other Transaction Documents.
Capital Expenditure shall mean any expenditure which, in
accordance with GAAP, is required to be capitalized on the balance sheet of the
Person making the same.
Capitalized Lease shall mean any lease of Property, whether
real and/or personal, by a Person as lessee which in accordance with GAAP is
required to be capitalized on the balance sheet of such Person.
Capitalized Lease Obligations of any Person shall mean, as of
the date of any determination thereof, the amount at which the aggregate rental
obligations due and to become due under all Capitalized Leases under which such
Person is a lessee would be reflected as a liability on a balance sheet of such
Person in accordance with GAAP.
- 5 -
12
CERCLA shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. Sections 9601 et seq., and as the
same may from time to time be further amended.
Co-Agent shall mean either of Xxxxxx Trust and Savings Bank,
an Illinois banking corporation, or SouthTrust Bank of Alabama, National
Association, a national banking association, and Co-Agents shall mean both of
them.
Code shall mean the Internal Revenue Code of 1986, as amended,
and any successor statute of similar import, together with the regulations
thereunder, in each case as in effect from time to time. References to
sections of the Code shall be construed to also refer to any successor
sections.
Collateral Assignment shall mean that certain Patent and
Trademark Collateral Assignment and Security Agreement executed by Borrower in
favor of Agent for the benefit of each of the Banks, as amended by the
Amendment to Collateral Assignment and as the same may from time to time be
further amended, modified, extended or renewed.
Commitment shall mean, with respect to each Bank, the sum of
such Bank's Revolving Credit Commitment, its Term Loan Commitment and its Swing
Line Commitment, if any.
Consolidated Cash Flow Coverage Ratio shall mean, as of any
date for which it is being determined, the ratio of (a) Consolidated EBITDA
plus Operating Lease Obligations of Borrower and its Subsidiaries, all
determined for the twelve-month period ending on the date of such calculation
on a consolidated basis and in accordance with GAAP, to (b) Consolidated
Interest Expense (less any original issue discount or other non-cash
capitalized interest expense, discount or fee included therein) plus
Consolidated Current Funded Debt plus Capital Expenditures plus Operating Lease
Obligations of Borrower and its Subsidiaries, all determined for the
twelve-month period ending on the date of such calculation on a consolidated
basis and in accordance with GAAP.
Consolidated Current Funded Debt shall mean, as of any date of
determination thereof, the sum of, without duplication, (a) all Consolidated
Senior Secured Debt having a final maturity of less than one (1) year from the
date of determination thereof, plus cash Distributions permitted during the one
(1) year period from the date of determination on the 14.25% Senior
Exchangeable Preferred Stock Due 2007 under Section 10.2(i) herein, plus (b)
all payments in respect of Consolidated Senior Secured Debt having a final
maturity of more than one (1) year from the date of determination thereof that
are required to be made within one (1) year from the applicable date of
determination of Consolidated Current Funded Debt.
Consolidated EBITDA shall mean, for the period in question,
the sum of (a) Consolidated Net Income during such period plus (b) to the
extent deducted in determining Consolidated Net Income, the sum of (i)
Consolidated Interest Expense during such period, plus (ii) all provisions for
any Federal, state, local and/or foreign income taxes made by Borrower and its
Subsidiaries during such period (whether paid or deferred) plus (iii) all
depreciation and
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13
amortization expenses of Borrower and its Subsidiaries during such period, all
determined on a consolidated basis and in accordance with GAAP.
Consolidated Senior Secured Debt shall mean, as of the date of
any determination thereof, all Debt of Borrower and its Subsidiaries,
determined on a consolidated basis and in accordance with GAAP, minus the then
outstanding principal balance under the Senior Unsecured Notes and under any
Subordinated Indebtedness.
Consolidated Interest Expense shall mean, for the period in
question, without duplication, all gross interest expense of Borrower and its
Subsidiaries (including, without limitation, all commissions, discounts and/or
related amortization and other fees and charges owed by Borrower and its
Subsidiaries with respect to letters of credit and bankers' acceptance
financing, the net costs associated with interest swap obligations of Borrower
and its Subsidiaries, capitalized interest expense, the interest portion of
Capitalized Lease Obligations and the interest portion of any deferred payment
obligation) during such period, all determined on a consolidated basis and in
accordance with GAAP.
Consolidated Net Income and Consolidated Net Loss shall mean,
for the period in question, the after-tax net income or loss of Borrower and
its Subsidiaries during such period, determined on a consolidated basis and in
accordance with GAAP, but excluding in any event the following:
(i) any net gain or net loss (net of expenses and
taxes applicable thereto) for such period resulting from the sale,
transfer or other disposition of fixed or capital assets (i.e., assets
other than current assets);
(ii) any gains or losses resulting from any
reappraisal, revaluation or write-up or write-down of assets;
(iii) any equity of Borrower or any Subsidiary in
the undistributed earnings of any corporation which is not a
Subsidiary;
(iv) undistributed earnings of any Subsidiary to
the extent that the declaration or payment of dividends or other
distributions by such Subsidiary is not at the time permitted by the
terms of its charter documents or any agreement, document, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Subsidiary;
(v) gains or losses from the acquisition or
disposition of Investments;
(vi) gains from the retirement or extinguishment
of Debt;
(vii) gains on collections from insurance policies
or settlements (net of premiums paid or other expenses incurred with
respect to such gains during the fiscal period in which the gain
occurs, to the extent such premiums or
- 7 -
14
other expenses are not already reflected in Consolidated Net Income
for such fiscal period);
(viii) any net income or gain (but not any net loss)
during such period from any change in accounting principles, from any
discontinued operations or the disposition thereof of from any prior
period adjustments;
(ix) any extraordinary gains and/or losses; and
(x) any fees or expenses relating to the closing
of Borrower's acquisition of the Acquired Company or in connection
with the Senior Unsecured Notes to be issued by Borrower as permanent
financing in refinancing such transaction;
all determined in accordance with GAAP. If the preceding calculation results
in a number less than zero, such amount shall be considered a Consolidated Net
Loss.
Consolidated Subsidiary shall mean, as of any date of
determination thereof, any Subsidiary or other entity (other than an
Unrestricted Subsidiary), the assets and liabilities of which are required to
be consolidated with those of Borrower in its consolidated financial statements
as of such date in accordance with GAAP.
Consolidated Total Debt shall mean, as of the date of any
determination thereof, all Debt of Borrower and its Subsidiaries as of such
date, determined on a consolidated basis and in accordance with GAAP.
Current Assets shall mean, with respect to any Person, all
assets of such Person which, in accordance with GAAP, are required to be
classified as current assets on a balance sheet of such Person.
Current Liabilities shall mean, with respect to any Person,
all assets which, in accordance with GAAP, are required to be classified as
current liabilities on a balance sheet of such Person.
Default shall mean any event or condition the occurrence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default as defined in Section 11 hereof.
Debt of any Person shall mean, as of the date of determination
thereof, the sum of (a) all Indebtedness of such Person for borrowed money or
which has been incurred to acquire Property plus (b) all Capitalized Lease
Obligations of such Person plus (c) all Guarantees by such Person of Debt of
others.
Deeds of Trust shall mean each of those certain Deeds of Trust
and Security Agreements and Mortgages and Security Agreements described in
Section 8.1 herein, dated as of October 5, 1995 and executed by Borrower in
favor of Agent for the benefit of each of the
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15
Banks, as amended by the Amendments to Deeds of Trust and as the same may from
time to time be further amended, modified, extended or renewed.
Distribution in respect of any corporation shall mean:
(a) dividends or other distributions on or in
respect of any of the capital stock of such corporation; and
(b) the redemption, repurchase or other
acquisition of any capital stock of such corporation or of any warrants, rights
or other options to purchase any such capital stock (except when solely in
exchange for such stock).
Domestic Business Day shall mean any day except a Saturday,
Sunday or legal holiday observed by the Agent or by commercial banks in St.
Louis, Missouri.
Environmental Claim shall mean any administrative, regulatory
or judicial action, judgment, order, consent decree, suit, demand, demand
letter, claim, Lien, notice of noncompliance or violation, investigation or
other proceeding arising (a) pursuant to any Environmental Law or governmental
or regulatory approval issued under any such Environmental Law, (b) from the
presence, use, generation, storage, treatment, Release, threatened Release,
disposal, remediation or other existence of any Hazardous Substance, (c) from
any removal, remedial, corrective or other response action pursuant to an
Environmental Law or the order of any governmental or regulatory authority or
agency, (d) from any third party seeking damages, contribution,
indemnification, cost recovery, compensation, injunctive or other relief in
connection with a Hazardous Substance or arising from alleged injury or threat
of injury to health, safety, natural resources or the environment or (e) from
any Lien against any Property owned, leased or operated by Borrower, any
Subsidiary or any Unrestricted Subsidiary in favor of any governmental or
regulatory authority or agency in connection with a Release, threatened Release
or disposal of a Hazardous Substance.
Environmental Law shall mean any Federal, state or local
statute, law, rule, regulation, order, consent decree, judgment, permit,
license, code, deed restriction, common law, treaty, convention, ordinance or
other governmental requirement relating to public health, safety or the
environment, including, without limitation, those relating to Releases,
discharges or emissions to air, water, land or groundwater, to the use of
groundwater, to the use and handling of polychlorinated biphenyls or asbestos,
to the disposal, treatment, storage or management of hazardous or solid waste,
Hazardous Substances or crude oil, or any fraction thereof, to exposure to
toxic or hazardous materials, to the handling, transportation, discharge or
release of gaseous or liquid Hazardous Substances, in each case applicable to
any of the Property owned, leased or operated by Borrower, any Subsidiary or
any Unrestricted Subsidiary or the operation, construction or modification of
any such Property, including, without limitation, the following: CERCLA, the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976 and the Hazardous and Solid Waste Amendments of 1984, the Hazardous
Materials Transportation Act, as amended, the Federal Water Pollution Control
Act, as amended by the Clean Water Act of 1976, the Safe Drinking Water Control
Act, the Clean Air Act of 1966, as amended, the Toxic Substances Control Act of
1976, the
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16
Occupational Safety and Health Act of 1977, as amended, the Emergency Planning
and Community Right-to-Know Act of 1986, the National Environmental Policy Act
of 1975, the Oil Pollution Act of 1990 and any similar or implementing state or
local law, and any state or local statute and any further amendments to these
laws providing for financial responsibility for cleanup or other actions with
respect to the Release or threatened Release of Hazardous Substances or crude
oil, or any fraction thereof and all rules and regulations promulgated
thereunder.
ERISA shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
ERISA Affiliate shall mean any corporation, trade or business
that is, along with Borrower, any Subsidiary and any Unrestricted Subsidiary, a
member of a controlled group of corporations or a controlled group of trades or
businesses, as described in Sections 414(b) and 414(c), respectively, of the
Code or Section 4001 of ERISA.
Eurodollar Business Day shall mean any Domestic Business Day
upon which eurodollars dealers are offering Eurodollar deposits to Mercantile
in the interbank eurodollar market.
Event of Default shall have the meaning ascribed thereto in
Section 11.
Excess Cash Flow means, for any fiscal year of Borrower, (i)
Consolidated Net Income for such fiscal year, plus to the extent deducted in
determining Consolidated Net Income, all depreciation, amortization and other
noncash expenses of Borrower and its Subsidiaries for such fiscal year, plus to
the extent deducted in determining Consolidated Net Income, all gains
referenced in items (i), (v), (vii) or (ix) of the definition of Consolidated
Net Income, plus the decrease, if any, in Adjusted Consolidated Working Capital
from the first day of such period to the last day of such period, minus (ii)
the sum of (a) principal payments made during such fiscal year on any
Consolidated Senior Secured Debt, (b) any increase in Adjusted Consolidated
Working Capital from the first day of such period to the last day of such
period, and (c) Capital Expenditures, all calculated for such fiscal year for
the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP.
Fed Funds Rate shall mean a rate per annum equal to the rate
determined by Agent as of the opening of business on each Domestic Business Day
for purchasing overnight federal funds in the national market, which rate shall
fluctuate as and when said overnight federal funds rate shall change.
GAAP shall mean generally accepted accounting principles at
the time in the United States.
Guarantee by any Person shall mean any obligation (other than
endorsements of negotiable instruments for deposit or collection in the
ordinary course of business), contingent
- 10 -
17
or otherwise, of such Person guaranteeing, or in effect guaranteeing, any
Indebtedness, liability, dividend or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, all obligations incurred through an agreement, contingent
or otherwise, by such Person: (a) to purchase such Indebtedness or obligation
or any Property or assets constituting security therefor, (b) to advance or
supply funds (i) for the purchase or payment of such Indebtedness or
obligation, (ii) to maintain working capital or other balance sheet condition
or otherwise to advance or make available funds for the purchase or payment of
such Indebtedness or obligation, (iii) to lease property or to purchase
securities or other property or services primarily for the purpose of assuring
the owner of such Indebtedness or obligation of the ability of the primary
obligor to make payment of the Indebtedness or obligation or (iv) otherwise to
assure the owner of the Indebtedness or obligation of the primary obligor
against loss in respect thereof. For the purposes of all computations made
under this Agreement, a Guarantee in respect of any Indebtedness for borrowed
money shall be deemed to be Indebtedness equal to the then outstanding
principal amount of such Indebtedness for borrowed money which has been
guaranteed or such lesser amount to which the maximum exposure of the guarantor
shall have been specifically limited, and a Guarantee in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness
equal to the maximum aggregate amount of such obligation, liability or dividend
or such lesser amount to which the maximum exposure of the guarantor shall have
been specifically limited. Guarantee when used as a verb shall have a
correlative meaning.
Guaranty shall mean any unlimited continuing guaranty of all
of Borrower's Obligations executed now or at any time hereafter by any
Subsidiary of Borrower.
Xxxxxx shall mean Xxxxxx Trust and Savings Bank, and its
successors and assigns.
Hazardous Substance shall mean any hazardous or toxic
material, substance or waste, pollutant or contaminant which is regulated under
any Environmental Law, including, without limitation, any material, substance
or waste which is: (a) defined as a hazardous substance under Section 311 of
the Federal Water Pollution Control Act (33 U.S.C. Sections 1317), as amended;
(b) regulated as a hazardous waste under Section 1004 or Section 3001 of the
Federal Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act (42 U.S.C. Sections 6901 et seq.), as amended; (c) defined as a
hazardous substance under Section 101 of the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Sections 9601 et seq.), as
amended; or (d) defined or regulated as a hazardous substance or hazardous
waste under any rules or regulations promulgated under any of the foregoing
statutes.
Hibernia shall mean Hibernia National Bank, and its successors
and assigns.
Indebtedness shall mean, with respect to any Person, without
duplication, all indebtedness, liabilities and obligations of such Person which
are classified upon a balance sheet of such Person as liabilities of such
Person, and in any event shall include all (i) obligations of such Person for
borrowed money or which have been incurred to acquire Property, (ii)
obligations secured by any Lien on, or payable out of the proceeds of
production from, any Property or assets owned by such Person, whether or not
such Person has assumed or become liable for the payment of such obligations,
(iii) indebtedness, liabilities and obligations of third
- 11 -
18
parties, including joint ventures and partnerships of which such Person is a
venturer or general partner, recourse to which may be had against such Person,
(iv) obligations created or arising under any conditional sale or other title
retention agreement with respect to Property acquired by such Person,
notwithstanding the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited to repossession
or sale of such Property, (v) Capitalized Lease Obligations of such Person,
(vi) indebtedness, liabilities and obligations of such Person under Guarantees
and (vii) reimbursement obligations of such Person with respect to letters of
credit issued for the account of such Person, provided, however, that for
purposes of calculating Consolidated Senior Secured Debt and Consolidated Total
Debt hereunder, the term Indebtedness shall not include (a) accounts payable
and accrued liabilities incurred in the ordinary course of business and
classified as current liabilities, (b) obligations of such Person relating to
employee benefit plans permitted pursuant to the terms of this Agreement, (c)
obligations of such Person with respect to the 14.25% Senior Exchangeable
Preferred Stock Due 2007, (d) deferred income tax liabilities of such Person,
(e) obligations with respect to declared and unpaid dividends of such Person to
the extent permitted pursuant to the terms of this Agreement, and (f)
obligations of such Person with respect to the repurchase of such Person's
common stock to the extent such repurchases are permitted pursuant to the terms
of this Agreement.
Intangibles shall mean all patents, trademarks, service marks,
copyrights, trade names, goodwill (including any amounts, however designated,
representing the cost of acquisition of business and investments in excess of
the book value thereof), unamortized debt discount and expense, unamortized
deferred charges, deferred research and development costs, any write-up of
asset value after the date of this Agreement, noncompetition covenants, signing
bonuses and any other assets treated as intangible assets under GAAP.
Interest Period shall mean with respect to each LIBOR Loan:
(i) initially, the period commencing on the date
of such Loan and ending 1, 2, 3 or 6 months thereafter (or such other
period agreed upon in writing by Borrower and all of the Banks), as
the Borrower may elect in the applicable Notice of Borrowing; and
(ii) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to such Loan
and ending 1, 2, 3 or 6 months thereafter (or such other period agreed
upon in writing by Borrower and all of the Banks), as Borrower may
elect pursuant to Section 6.1;
provided that:
(iii) subject to clause (iv) below, if any Interest
Period would otherwise end on a day which is not a Eurodollar Business
Day, such Interest Period shall be extended to the next succeeding
Eurodollar Business Day unless such Eurodollar Business Day falls in
another calendar month, in which case such Interest Period shall end
on the immediately next preceding Eurodollar Business Day; and
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19
(iv) no Interest Period for a LIBOR Loan which is
a Revolving Credit Loan shall extend beyond the last day of the
Revolving Credit Period, and no Interest Period for a LIBOR Loan which
is a Term Loan shall extend beyond the last day of the Term hereof.
Investment shall mean any investment by Borrower or any
Subsidiary in any Person, whether payment therefor is made in cash or capital
stock of Borrower or any Subsidiary, and whether such investment is by
acquisition of stock or Indebtedness, or by loan, advance, transfer of property
out of the ordinary course of business, capital contribution, equity or profit
sharing interest, extension of credit on terms other than those normal in the
ordinary course of business (or in the case of an Unrestricted Subsidiary, any
granting of trade credit or other credit including such credit extended on
normal terms), Guarantee or otherwise becoming liable (contingently or
otherwise) in respect of the Indebtedness of any Person, or otherwise.
Letter of Credit and Letters of Credit shall have the meanings
ascribed thereto in Section 4.1(a).
Letter of Credit Application shall mean an application and
agreement for irrevocable standby letter of credit in the form of Exhibit E
attached hereto and incorporated herein by reference, or an application and
agreement for commercial letter of credit in the form of Exhibit F attached
hereto and incorporated herein by reference, executed by Borrower, as account
party, and delivered to Bank pursuant to Section 4.1(a), as the same may from
time to time be amended, modified, extended or renewed.
Letter of Credit Commitment shall have the meaning ascribed
thereto in Section 4.1(a).
Letter of Credit Commitment Fee shall have the meaning
ascribed thereto in Section 4.1(d).
Letter of Credit Issuance Fee shall have the meaning ascribed
thereto in Section 4.1(d).
Letter of Credit Loan shall have the meaning ascribed thereto
in Section 4.1(c).
Letter of Credit Period shall mean the period commencing on
the date of this Agreement and ending September 30, 2000.
Letter of Credit Request shall have the meaning ascribed
thereto in Section 4.1(a).
LIBOR Base Rate means, for an Interest Period, (a) the LIBOR
Index Rate for such Interest Period, if such rate is available, and (b) if the
LIBOR Index Rate cannot be determined, the arithmetic average of the rates of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
at which deposits in U.S. dollars in immediately available funds are offered to
the Agent at 11:00 a.m. (St. Louis time) two (2) Business Days before the
beginning of such Interest Period by two (2) or more major banks in the
interbank eurodollar
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20
market selected by the Agent for a period equal to such Interest Period and in
an amount equal or comparable to the principal amount of the LIBOR Loan
scheduled to be made available by the Banks. As used herein, "LIBOR Index
Rate" means, for any Interest Period, the rate per annum (rounded upwards, if
necessary, to the next higher one hundred- thousandth of a percentage point)
for deposits in U.S. Dollars for a period equal to such Interest Period, which
appears on the Telerate Page 3750 as of 9:00 a.m. (St. Louis time) on the day
two Business Days before the commencement of such Interest Period.
LIBOR Loan shall mean a loan bearing interest at the LIBOR
Rate.
LIBOR Rate shall mean (a) the quotient of the (i) LIBOR Base
Rate divided by (ii) one minus the applicable LIBOR Reserve Percentage plus (b)
the Applicable Margin.
LIBOR Reserve Percentage shall mean for any day the percentage
(including any supplemental percentage applied on a marginal basis or any other
reserve requirement having a similar effect), expressed as a decimal, which is
in effect on the first day of the applicable Interest Period, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) under
Regulation D (or any other then applicable regulation of the Board of Governors
(or any successor)) with respect to "Eurocurrency Liabilities." The LIBOR Rate
shall be adjusted automatically on and as of the effective date of any change
in the LIBOR Reserve Percentage.
Lien shall mean any interest in Property securing an
obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on common law, statute or contract,
including, without limitation, any security interest, mortgage, deed of trust,
pledge, hypothecation, judgment lien or other lien or encumbrance of any kind
or nature whatsoever, any conditional sale or trust receipt, any lease,
consignment or bailment for security purposes and any Capitalized Lease. The
term "Lien" shall include reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting Property.
Loan shall mean each Revolving Credit Loan (whether a Base
Rate Loan or an LIBOR Loan), each Swing Loan, each Letter of Credit Loan and
the Term Loan (whether a Base Rate Loan or a LIBOR Loan) and Loans shall mean
any or all of the foregoing.
Material Adverse Effect shall mean (a) a material adverse
effect on the Properties, assets, liabilities, business, operations, prospects,
income or condition (financial or otherwise) of Borrower and its Subsidiaries
taken as a whole, (b) material impairment of Borrower's ability to perform any
of its obligations under this Agreement, any of the Notes, any of the Letter of
Credit Application(s) or any of the other Transaction Documents or (c) material
impairment of the enforceability of the rights of, or benefits available to,
the Agent or any of the Banks under this Agreement, any of the Notes, any of
the Letter of Credit Application(s) or any of the other Transaction Documents.
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21
Mercantile shall mean Mercantile Bank of St. Louis National
Association, a national banking association, in its individual corporate
capacity as a Bank hereunder and not as Agent hereunder.
Moody's shall mean Xxxxx'x Investors Service, Inc.
Multi-Employer Plan shall mean a "multi-employer plan" as
defined in Section 4001(a)(3) of ERISA which is maintained for employees of
Borrower, any Subsidiary or any ERISA Affiliate or to which Borrower, any
Subsidiary of Borrower or any ERISA Affiliate has contributed in the past or
currently contributes.
NBD shall mean NBD Bank, and its successors and assigns.
Notes shall mean any or all of the Revolving Credit Notes, the
Swing Line Note and/or the Term Notes.
Notice of Borrowing shall have the meaning ascribed thereto in
Section 3.3.
Obligor shall mean Borrower and each other Person who is or
shall at any time hereafter become primarily or secondarily liable on any of
Borrower's Obligations or who grants the Agent or any of the Banks a Lien upon
any of the Property or assets of such Person as security for any of Borrower's
Obligations.
Occupational Safety and Health Laws shall mean the Occupational
Safety and Health Act of 1970, as amended, and any other Federal, state or local
statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to or imposing liability or standards of conduct concerning employee
health and/or safety, as now or at any time hereafter in effect.
Operating Lease shall mean any lease of Property, whether real
and/or personal, by a Person as lessee which is not a Capitalized Lease.
Operating Lease Obligations of any Person shall mean, for the
period in question, all of the rental obligations due and to become due under
all Operating Leases under which such Person is a lessee.
PBGC shall mean the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.
Pension Plan shall mean a "pension plan," as such term is
defined in Section 3(2) of ERISA, which is established or maintained by
Borrower, any Subsidiary of Borrower or any ERISA Affiliate, other than a
Multi-Employer Plan.
Permitted Liens shall mean any of the following:
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22
(a) Liens for property taxes and assessments or
governmental charges or levies and Liens securing claims or demands of
mechanics and materialmen, provided payment thereof is not at the time required
by Section 10.1(d) and/or Section 10.1(e);
(b) Liens (other than any Liens imposed by ERISA)
incidental to the conduct of business or the ownership of Properties and assets
(including Liens in connection with worker's compensation, unemployment
insurance and other like laws, warehousemen's and attorneys' liens and
statutory landlords' liens) and Liens to secure the performance of bids,
tenders or trade contracts, or to secure statutory obligations, surety or
appeal bonds or other Liens of like general nature incurred in the ordinary
course of business and not in connection with the borrowing of money or the
acquisition of inventory or other Property; provided in each case the
obligation secured is not overdue or, if overdue, is being contested in good
faith by appropriate actions or proceedings being diligently conducted and for
which adequate reserves in accordance with GAAP have been set aside;
(c) Minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the activities of Borrower
and its Subsidiaries or which customarily exist on properties of corporations
engaged in similar activities and similarly situated and which do not in any
event materially impair the use of such real properties in the operation of the
business of the Borrower and its Subsidiaries;
(d) Liens created or permitted by the Security
Agreement, the Deeds of Trust and the Collateral Assignment or otherwise
permitted by the Required Banks in writing;
(e) Purchase money security interests in or
purchase money liens on real or personal Property acquired after the date
hereof to secure purchase money Indebtedness not to exceed the limitation set
forth in Section 10.2(a)(xiv), incurred in connection with the acquisition of
such Property, which security interests or liens cover only the real or
personal Property so acquired;
(f) Liens reflected on Schedule 10.2(b) attached
hereto in existence as of the date hereof, and any extensions, renewals and
refinancings thereof (provided that any such refinancing shall not increase the
indebtedness secured thereby without the prior written consent of the Required
Banks);
(g) Liens in favor of Borrower on all or on part
of the assets of any Subsidiary securing indebtedness owing by such Subsidiary
to Borrower;
(h) Liens created by any Subsidiary on all or
part of its assets to secure Borrower's Obligations; and
(i) Liens on Properties in respect of judgments
or awards, the Indebtedness with respect to which is permitted by Section
10.2(a)(vii).
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Person shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, institution, entity or government (whether national, Federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
Pledge Agreement shall mean that certain General Pledge and
Security Agreement described in Section 8.3 herein dated as of October 5, 1995
and executed by DPC Acquisition Corp., a Delaware corporation, in favor of
Agent for the benefit of all of the Banks, as amended by the Amendment to
Pledge Agreement and as the same may from time to time be further amended,
modified, extended or renewed.
Prime Rate shall mean the interest rate announced from time to
time by Mercantile as its "prime rate" on commercial loans (which rate shall
fluctuate as and when said prime rate shall change).
Property shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible. Properties
shall mean the plural of Property. For purposes of this Agreement, Borrower
and each Subsidiary shall be deemed to be the owner of any Property which it
has acquired or holds subject to a conditional sale agreement, financing lease
or other arrangement pursuant to which title to the Property has been retained
by or vested in some other Person for security purposes.
Pro Rata Share shall mean with respect to each Bank, the
percentage amount equal to the sum of such Bank's Revolving Credit Commitment
plus its Term Loan Commitment, divided by the sum of all of the Banks'
Revolving Credit Commitments and Term Loan Commitments.
RCRA shall mean the Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid
Waste Amendments of 1984, 42 U.S.C. Sections 6901 et seq., and any future
amendments.
Regulation D shall mean Regulation D of the Board of Governors
of the Federal Reserve System, as amended.
Regulatory Change shall have the meaning ascribed thereto in
Section 6.9.
Release shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment, including, without limitation, the abandonment
or discarding of barrels, drums, containers, tanks and/or other receptacles
containing or previously containing any Hazardous Substance.
Reportable Event shall have the meaning given to such term in
ERISA.
Required Banks shall mean at any time Banks having Sixty-Six
and Two Thirds Percent (66-2/3%) of the aggregate amount of Loans and Letters
of Credit then outstanding or,
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24
if no Loans or Letters of Credit are then outstanding, Sixty-Six and Two Thirds
Percent (66-2/3%) of the total Commitments of all of the Banks.
Responsible Officer shall mean the chief executive officer,
president, chief operating officer, chief financial officer or chief accounting
officer of Borrower or any other officer of Borrower involved in the financial
administration or controllership function of Borrower.
Restricted Investment shall mean any Investment, or any
expenditure or any incurrence of any liability to make any expenditure for an
Investment, other than:
(a) Loans, Guarantees and/or advances by Borrower
or a Subsidiary to a Wholly-Owned Subsidiary, provided, however, that neither
Borrower nor any Subsidiary shall Guarantee or otherwise become liable,
directly or indirectly, for any indebtedness, liability, agreement or other
obligation of any Unrestricted Subsidiary;
(b) Loans, Guarantees and/or advances by any
Subsidiary to Borrower which are subordinated in writing to the payment of the
Borrower's Obligations in form and substance satisfactory to the Required
Banks;
(c) Direct obligations of the United States of
America or any instrumentality or agency thereof, the payment of which is
unconditionally guaranteed by the United States of America or any
instrumentality or agency thereof (all of which Investments must mature within
twelve (12) months from the time of acquisition thereof);
(d) Investments in readily marketable commercial
paper which, at the time of acquisition thereof by Borrower or any Subsidiary,
is rated A-1 or better by S&P or P-1 or better by Moody's and which matures
within 270 days from the date of acquisition thereof, provided that the issuer
of such commercial paper shall, at the time of acquisition of such commercial
paper, have a senior long-term debt rating of at least A by S&P and Moody's;
(e) Preferred stocks of corporations organized
and existing under the laws of the United States of America or any state
thereof having ratings of AAA from S&P and Aaa from Moody's;
(f) Negotiable certificates of deposit or
negotiable bankers acceptances issued by any of the Banks or any other bank or
trust company organized under the laws of the United States of America or any
state thereof, which bank or trust company (other than the Banks to which such
restrictions shall not apply) is a member of both the Federal Deposit Insurance
Corporation and the Federal Reserve System and is rated B or better by
Xxxxxxxx Bank Watch Service (all of which Investments must mature within twelve
(12) months from the time of acquisition thereof);
(g) Repurchase agreements, which shall be
collateralized for at least 100% of face value, issued by any of the Banks or
any other bank or trust company organized under the laws of the United States
or any state thereof, which bank or trust company (other than
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25
the Banks to which such restrictions shall not apply) is a member of both the
Federal Deposit Insurance Corporation and the Federal Reserve System and is
rated B or better by Xxxxxxxx Bank Watch Service (all of which Investments must
mature within twelve (12) months from the time of acquisition thereof);
(h) Investments in mutual funds the investments
of which are limited to direct obligations of the United States of America or
any instrumentality or agency thereof, the payment of which is unconditionally
guaranteed by the United States of America or any instrumentality or agency
thereof;
(i) Investments existing as of the date hereof as
described in Schedule 9.18, and any future retained earnings in respect
thereof;
(j) Investments in Acceptable Acquisitions,
provided, however, that if such Acquisition is of an Unrestricted Subsidiary or
a new Unrestricted Subsidiary is created for purposes of completing such
Acquisition, the limitation of subparagraph (k) below shall apply;
(k) Investments in new Subsidiaries, Unrestricted
Subsidiaries or in joint ventures, in an aggregate amount not to exceed
$10,000,000.00;
(l) Loans, Guarantees or advances to officers or
employees of Borrower or a Subsidiary in the aggregate principal amount of up
to $200,000.00 at any one time outstanding; and
(m) Investments, in an aggregate amount not to
exceed $2,500,000.00, in notes due from management of Borrower solely in
consideration of the purchase of stock of the Borrower secured by a pledge of
such stock, which notes upon demand of the Required Banks shall be endorsed and
delivered to Agent pursuant to Section 2(j) of the Security Agreement.
Revolving Credit Loan and Revolving Credit Loans shall have
the meanings ascribed thereto in Section 3.1(a).
Revolving Credit Notes shall have the meaning ascribed thereto
in Section 3.4(a).
Revolving Credit Period shall mean the period commencing on
the date of this Agreement and ending September 30, 2000.
Revolving Credit Commitment shall mean for each Bank, subject
to termination or reduction as set forth in Section 3.5, the amount set forth
as the Revolving Credit Commitment for such Bank next to its name on the
signature pages hereof.
S&P shall mean Standard and Poor's Ratings Group.
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26
Security Agreement shall mean that certain Security Agreement
described in Section 8.2 herein dated as of October 5, 1995 and executed by
Borrower in favor of Agent for the benefit of all of the Banks, as amended by
the Amendment to Security Agreement and as the same may from time to time be
further amended, modified, extended or renewed.
Selling Shareholders shall mean each Person conforming to the
definition of "Stockholder" as defined in that certain Stock Voting Agreement
dated as of August 31, 1995 made by and among the Acquired Company, DPC
Acquisition Corp., a Delaware corporation and DPC Subsidiary Acquisition Corp.,
a Delaware corporation.
Senior Unsecured Notes shall mean the 10-5/8% Senior Notes Due
2006 (as defined in that certain Indenture dated as of March 4, 1996 made by an
among Borrower and United States Trust Company of Texas, N.A., as trustee).
SouthTrust shall mean SouthTrust Bank of Alabama, National
Association, and its successors and assigns.
Subordinated Indebtedness shall mean all Indebtedness of
Borrower which is subordinated in writing (either by its terms or pursuant to a
subordination agreement) to the payment and priority of all of the Borrower's
Obligations in form and substance satisfactory to the Required Banks.
Subsidiary shall mean (a) any corporation of which fifty
percent (50%) or more of the issued and outstanding capital stock entitled to
vote for the election of directors (other than by reason of default in the
payment of dividends) is at the time owned directly or indirectly by Borrower
or any Subsidiary of Borrower, (b) any partnership of which fifty percent (50%)
or more of the outstanding partnership interests is at the time owned directly
or indirectly by Borrower or any Subsidiary of Borrower, and (c) any limited
liability company or other entity, of which fifty percent (50%) or more of the
outstanding member interests or other ownership interests of which are at the
time owned directly or indirectly by Borrower or any Subsidiary of Borrower;
provided, an Unrestricted Subsidiary shall not be included in the term
"Subsidiary."
Swing Loan shall have the meanings ascribed thereto in Section
3.2.
Swing Line Note shall have the meaning ascribed thereto in
Section 3.2.
Swing Line Commitment shall mean the commitment of Mercantile
to make Swing Loans as set forth herein in an aggregate amount not to exceed
$4,000,000.00 at any one time outstanding.
Telerate Page 3750 means the display designated as "Page 3750"
on the Telerate Service (or such other page as may replace Page 3750 on that
service or such other service as may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rates for U.S. Dollar Deposits).
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27
Term shall have the meaning ascribed thereto in Section 1.
Term Loan and Term Loans shall have the meaning ascribed
thereto in Section 5.1.
Term Notes shall have the meaning ascribed thereto in Section
5.2(a).
Term Loan Commitment shall mean for each Bank the amount set
forth as the Term Loan Commitment of such Bank next to its name on the
signature pages hereof.
Total Revolver Outstandings shall mean the sum of (i) the
aggregate principal amount of all outstanding Revolving Credit Loans, plus (ii)
the aggregate principal amount of the outstanding Swing Loans, plus (iii) the
aggregate principal amount of all outstanding Letter of Credit Loans (other
than a Letter of Credit Loan made with respect to the Bond Letter of Credit)
plus (iv) the aggregate undrawn face amount of all outstanding Letters of
Credit (other than the Bond Letter of Credit).
Transaction Documents shall mean this Agreement, the Revolving
Credit Notes, the Term Notes, the Letter of Credit Application(s), the Deeds of
Trust, the Security Agreement, the Collateral Assignment, the Pledge Agreement
and all other agreements, documents and instruments heretofore, now or
hereafter delivered to the Agent or any of the Banks with respect to or in
connection with or pursuant to this Agreement, the Prior Agreement (if such
other agreements, documents or instruments have not otherwise been amended and
restated or expressly released in connection with the execution of this
Agreement), any Loans made hereunder or thereunder, any Letters of Credit
issued hereunder or thereunder, or any other of Borrower's Obligations, and
executed by or on behalf of Borrower, all as the same may from time to time be
amended, modified, extended or renewed.
Unrestricted Subsidiary shall mean any Person, which but for
part (ii) of this definition would have been a Subsidiary, in which the
Borrower or its Subsidiaries owns or intends to own an equity interest and that
(i) has been designated by Borrower to the Agent as an "Unrestricted
Subsidiary," and (ii) was not, at the time of such designation, a Subsidiary;
provided, however, that Borrower shall at no time have more than two
Unrestricted Subsidiaries with a maximum total Investment therein not to exceed
the limitation set forth in paragraph (k) of the definition of Restricted
Investment, and provided further that no such Unrestricted Subsidiary shall
have or incur Indebtedness of more that Twenty Million Dollars ($20,000,000.00)
at any time.
Welfare Plan shall mean a "welfare plan" as such term is
defined in Section 3(1) of ERISA, which is established or maintained by
Borrower, any Subsidiary of Borrower or any ERISA Affiliate, other than a
Multi-Employer Plan.
Wholly-Owned when used in connection with any Subsidiary shall
mean a Subsidiary of which all of the issued and outstanding shares of stock
(except shares required as directors' qualifying shares) shall be owned by
Borrower and/or one or more of its Wholly-Owned Subsidiaries.
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2.2 Accounting Terms and Determinations. Except as
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP as in effect from time to time, applied on a basis
consistent (except for changes approved by the Required Banks and by Borrower's
independent certified public accountants) with the most recent audited
financial statements of Borrower delivered to the Banks.
SECTION 3. THE REVOLVING CREDIT LOANS.
3.1 Revolving Credit Commitments. Subject to the terms
and conditions set forth in this Agreement and so long as no Default or Event
of Default under this Agreement has occurred and is continuing, during the
Revolving Credit Period, each Bank severally agrees to lend to Borrower from
time to time (individually, a "Revolving Credit Loan" and collectively, the
"Revolving Credit Loans") amounts not to exceed, in the aggregate at any one
time outstanding, the lesser of: (a) such Bank's Revolving Credit Commitment,
or (b) such Bank's Pro Rata Share of the sum of (i) the total Revolving Credit
Commitments of all of the Banks, minus (ii) the aggregate principal amount of
all outstanding Letter of Credit Loans (other than a Letter of Credit Loan made
with respect to the Bond Letter of Credit), minus (iii) the aggregate undrawn
face amount of all outstanding Letters of Credit (other than the Bond Letter of
Credit), and minus (iv) the principal amount of any outstanding Swing Loans.
Each Revolving Credit Loan under this Section 3.1 shall be made from the
several Banks ratably in proportion to their respective Pro Rata Shares, and
may be made as either (x) a Base Rate Loan, (y) a LIBOR Loan, or (z) any
combination thereof, as determined by Borrower with notice thereof to Agent
pursuant to Section 3.3. Each Revolving Credit Loan under this Section 3.1
which is a Base Rate Loan shall be for an aggregate principal amount of at
least $1,500,000.00 or any larger multiple of $100,000.00. Each Revolving
Credit Loan under this Section 3.1 which is a LIBOR Loan shall be for an
aggregate principal amount of at least $2,500,000.00 or any larger multiple of
$250,000.00. Within the foregoing limits, Borrower may borrow under this
Section 3.1, prepay under Section 6.4(a) or 6.4(b) and reborrow at any time
during the Revolving Credit Period under this Section 3.1; provided, however,
that Borrower covenants and agrees to cause the aggregate principal amount of
all Revolving Credit Loans, Swing Loans and Letter of Credit Loans outstanding
under this Agreement (but not including any Letters of Credit then outstanding
and undrawn or any Letter of Credit Loan made with respect to a draw under the
Bond Letter of Credit) to be repaid pursuant to Section 6.4 to an aggregate
outstanding principal amount of less than or equal to $10,000,000.00 without
reborrowing hereunder for a period of at least thirty (30) consecutive days
during each fiscal year ending as of September 30 occurring up to and including
September 30, 1997, and to an aggregate outstanding principal amount of less
than or equal to $7,500,000.00 without reborrowing hereunder for a period of at
least thirty (30) consecutive days during each fiscal year ending September 30
occurring thereafter during the Revolving Credit Period. The failure of any
Bank to make any Revolving Credit Loan required under this Agreement shall not
release any other Bank from its obligation to make Revolving Credit Loans as
provided herein.
3.2 The Swing Line. Subject to all of the terms and
conditions hereof and so long as no Default or Event of Default under this
Agreement has occurred and is continuing,
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Mercantile agrees to make loans to Borrower under a Swing Line ("Swing Loans")
which shall not in the aggregate at any time outstanding exceed the lesser of
(i) the Swing Line Commitment, or (ii) the difference between the Revolving
Credit Commitments of all of the Banks and the amount of the Revolving Credit
Loans, Letter of Credit Loans (other than any Letter of Credit Loan made with
respect to the Bond Letter of Credit) and the undrawn face amount of Letters of
Credit (other than the Bond Letter of Credit) then outstanding hereunder at the
time of computation. The Swing Line Commitment shall be available to Borrower
and may be availed of by Borrower from time to time, and borrowings thereunder
may be repaid and used again during the period ending on the last day of the
Revolving Credit Period. All Swing Loans shall be made hereunder only as Base
Rate Loans. All advances made by Mercantile to Borrower under the Swing Line
shall be evidenced by the Amended and Restated Swing Line Note of Borrower
dated as of the date hereof (the "Swing Line Note") payable to the order of
Mercantile in the amount of the Swing Line Commitment and being in the form
attached hereto as Exhibit B.
3.3 Method of Borrowing.
(a) With respect to each Revolving Credit Loan,
Borrower shall give notice (a "Notice of Borrowing") to the Agent by 11:00 a.m.
(St. Louis time) on the day of each Base Rate Loan, and by 11:00 a.m. (St.
Louis Time) at least two (2) Eurodollar Business Days before each LIBOR Loan,
specifying:
(i) the date of such Revolving Credit Loan, which
shall be a Domestic Business Day in the case of a Base Rate Loan and a
Eurodollar Business Day in the case of a LIBOR Loan,
(ii) the aggregate principal amount of such
Revolving Credit Loan,
(iii) whether such Loan is to be a Base Rate Loan
or a LIBOR Loan,
(iv) in the case of a LIBOR Loan, the duration of
the initial Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period,
(v) that on the date of, and after giving effect
to, such Revolving Credit Loan, no Default or Event of Default under
this Agreement has occurred and is continuing, and
(vi) that on the date of, and after giving effect
to, such Revolving Credit Loan, all of the representations and
warranties of Borrower contained in this Agreement and the other
Transaction Documents are true and correct in all material respects as
if made on and as of the date of such Revolving Credit Loan.
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A Notice of Borrowing shall not be required in connection with a Base Rate Loan
pursuant to Section 6.7 or 6.8.
(b) Upon receipt of a Notice of Borrowing given
to it, the Agent shall notify each Bank by 12:00 noon (St. Louis time) on the
date of receipt of such Notice of Borrowing by the Agent (which must be a
Domestic Business Day) of the contents thereof and of such Bank's ratable share
of such Revolving Credit Loan. A Notice of Borrowing shall not be revocable by
Borrower.
(c) Not later than 3:00 p.m. (St. Louis time) on
the date of each Revolving Credit Loan, each Bank shall make available its Pro
Rata Share of such Revolving Credit Loan, in Federal or other funds immediately
available in St. Louis, Missouri, to the Agent at its address specified in or
pursuant to Section 13.7. Agent shall not be required to make any amount
available to Borrower hereunder except to the extent it shall have received
such amounts from the Banks as set forth herein, provided, however, that unless
the Agent shall have been notified by a Bank prior to the date a Revolving
Credit Loan is to be made hereunder that such Bank does not intend to make its
Pro Rata Share of such Revolving Credit Loan available to the Agent, the Agent
may assume that such Bank has made such Pro Rata Share available to the Agent
on such date, and the Agent may in reliance upon such assumption make available
to the Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Agent by such Bank and the Agent has made such
amount available to the Borrower, the Agent shall be entitled to receive such
amount from such Bank forthwith upon its demand, together with interest thereon
in respect of each day during the period commencing on the date such amount was
made available to the Borrower and ending on but excluding the date the Agent
recovers such amount from the Bank at a rate per annum equal to the effective
rate charged to the Agent for overnight federal funds transactions with member
banks of the Federal Reserve System for each day as determined by the Agent (or
in the case of a day which is not a Domestic Business Day, then for the
preceding day). Unless the Agent determines that any applicable condition
specified in Section 7 has not been satisfied, the Agent will make the funds so
received from the Banks available to Borrower immediately thereafter at the
Agent's aforesaid address by crediting such funds to a demand deposit account
(or such other account mutually agreed upon in writing between Agent and
Borrower) of Borrower with the Agent.
(d) With respect to each Swing Loan, Borrower
shall give Mercantile prior notice (which may be written or oral but which must
be given prior to 2:00 p.m. St. Louis time on the date of the Swing Loan) of
the amount and date of each Swing Loan and, subject to all of the terms and
conditions hereof, the proceeds of such Swing Loan shall be made available to
Borrower on the date of request at the offices of the Agent in St. Louis,
Missouri. Borrower hereby authorizes and directs Mercantile, without further
authorization or instructions from it, to make Borrower a Swing Loan each
business day in an amount equal to the difference, if any, between (i) the
amount which Mercantile determines is necessary to pay items clearing on such
day, and (ii) the balance of available (as customarily determined by
Mercantile) funds in Borrower's general account with Mercantile as of such day,
and if the amount determined pursuant to clause (ii) above is in excess of the
amount determined pursuant to clause (i), then Mercantile is irrevocably
authorized and instructed to apply such excess to the reduction of the
outstanding balance of the Swing Loans without further instruction from
Borrower. Anything
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contained in the foregoing to the contrary notwithstanding, (i) the obligation
of Mercantile to make Swing Loans shall be subject to all of the terms and
conditions of this Agreement, (ii) Mercantile shall not be obligated to make
more than one Swing Loan to Borrower during any day, and (iii) Mercantile shall
make the determination of the amount to be borrowed or repaid pursuant to the
immediately preceding sentence as of a cutoff hour to be determined by
Mercantile (which shall generally be in the mid-morning of each business day),
and Mercantile shall incur no liability to Borrower for any interruptions or
errors made in connection with the foregoing procedures not caused by the gross
negligence or willful misconduct of Mercantile.
3.4 Revolving Credit Notes.
(a) The Revolving Credit Loans of each Bank to
Borrower during the Revolving Credit Period shall be evidenced by an Amended
and Restated Revolving Credit Note of Borrower dated the date hereof and
payable to the order of such Bank in a principal amount equal to its Revolving
Credit Commitment in substantially the form of Exhibit A attached hereto (with
appropriate insertions) (as the same may from time to time be amended, modified
extended or renewed, the "Revolving Credit Notes").
(b) Upon receipt of each Bank's Revolving Credit
Note pursuant to Section 3.1(a), the Agent shall mail such Revolving Credit
Note by certified mail, return receipt requested, to such Bank. Each Bank
shall record, and prior to any transfer of its Revolving Credit Note shall
endorse on the schedules forming a part thereof, appropriate notations to
evidence the date and amount of each Revolving Credit Loan made by it during
the Revolving Credit Period and the date and amount of each payment of
principal made by Borrower with respect thereto. Each Bank is hereby
irrevocably authorized by Borrower so to endorse its Revolving Credit Note and
to attach to and make a part of any such Revolving Credit Note a continuation
of any such schedule as and when required; provided, however that the
obligation of Borrower to repay each Revolving Credit Loan made hereunder shall
be absolute and unconditional, notwithstanding any failure of any Bank to
endorse or any mistake by any Bank in connection with endorsement on the
schedules attached to their respective Revolving Credit Notes. The books and
records of each Bank (including, without limitation, the schedules attached to
the Revolving Credit Notes) showing the account between such Bank and Borrower
shall be admissible in evidence in any action or proceeding and shall
constitute prima facie proof of the items therein set forth.
3.5 Termination or Reduction of Commitments. Borrower
may, upon three (3) Domestic Business Days' prior written notice to the Agent,
terminate entirely at any time, or proportionately reduce from time to time on
a pro rata basis among the Banks based on their respective Revolving Credit
Commitments by an aggregate amount of $1,000,000.00 or any larger multiple of
$500,000.00 the unused portions of the Revolving Credit Commitments; provided,
however, that (i) at no time shall the Revolving Credit Commitments be reduced
to a figure less than the Total Revolver Outstandings, (ii) at no time shall
the Revolving Credit Commitments be reduced to a figure greater than zero but
less than $5,000,000.00 and (iii) any such termination or reduction shall be
permanent and Borrower shall have no right to thereafter reinstate or increase,
as the case may be, the Revolving Credit Commitment of any Bank.
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3.6 Maturity. All Revolving Credit Loans and all Swing
Loans not paid prior to the last day of the Revolving Credit Period, together
with all accrued and unpaid interest thereon and all fees and other amounts
owing by Borrower to the Banks with respect thereto, shall be due and payable
on the last day of the Revolving Credit Period.
3.7 Swing Loan Settlement After Default. Upon the
occurrence of any Event of Default, Agent shall promptly so notify the other
Banks pursuant to Section 11 herein and of the amount of the Swing Loans from
Mercantile then outstanding, and each of the other Banks agrees to immediately
purchase from Mercantile with immediately available funds its Pro Rata Share of
the amount of all such Swing Loans, plus accrued and unpaid interest calculated
on such Pro Rata Share of such principal amount at a rate per annum equal to
the Base Rate. Following such advance by each Bank to Mercantile of its Pro
Rata Share of any such Swing Loans pursuant to the preceding sentence, each
such Bank shall thereafter receive its Pro Rata Share of all principal
payments, interest payments, fees and other amounts due with respect to such
Swing Loans when paid by the Borrower to the Agent hereunder. Such Loans shall
thereafter be evidenced by the Revolving Credit Notes of each of the Banks.
SECTION 4. LETTERS OF CREDIT.
4.1 Letter of Credit Commitment.
(a) Subject to the terms and conditions of this
Agreement, during the Letter of Credit Period of this Agreement, and so long as
no Default or Event of Default under this Agreement has occurred and is
continuing (provided, however, that Mercantile shall have no liability to any
of the other Banks for issuing a Letter of Credit after the occurrence of any
Default or Event of Default under this Agreement unless Mercantile has
previously received notice in writing to Mercantile by Borrower, the Agent or
any of the other Banks of the occurrence of such Default or Event of Default),
Mercantile has issued its direct pay Letter of Credit dated December 19, 1995
in the amount of $3,725,760.69 as credit enhancement for those certain
Industrial Revenue Bonds (The Xxxxx Products Company Project) Series 1991
issued by the County of Pueblo, Colorado (the "Bond Letter of Credit"), and
Mercantile hereby agrees to issue irrevocable standby and commercial letters of
credit for the account of Borrower (with the Bond Letter of Credit,
individually, a "Letter of Credit" and collectively, the "Letters of Credit")
(the "Letter of Credit Commitment") in an amount and for the term specifically
requested by Borrower by notice in writing to Mercantile in the form of Exhibit
D attached hereto and incorporated herein by reference (a "Letter of Credit
Request") at least three (3) Domestic Business Days prior to the requested
issuance thereof; provided, however, that:
(i) Borrower shall have executed and delivered to
Mercantile a Letter of Credit Application with respect to such Letter
of Credit;
(ii) the term of any such Letter of Credit shall
not extend beyond the earlier of (A) the last day of the Letter of
Credit Period or (B) for any standby Letter of Credit, three hundred
sixty-five (365) days from the issuance thereof, or for any commercial
Letter of Credit, one hundred eighty (180) days from the issuance
thereof;
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(iii) any Letter of Credit may only be utilized to
guaranty or support the payment of obligations of Borrower or any
Subsidiary to third parties;
(iv) the Total Revolver Outstandings shall not at
any one time exceed the sum of Twenty-Five Million Dollars
($25,000,000.00);
(v) the sum of (A) the aggregate undrawn face
amount of all outstanding Letters of Credit plus (B) the aggregate
principal amount of all outstanding Letter of Credit Loans shall not
at any one time exceed the sum of Seven Million Five Hundred Thousand
Dollars ($7,500,000.00); and
(vi) the text of any such Letter of Credit is
provided to Mercantile no less than three (3) Domestic Business Days
prior to the requested issuance date, which text must be acceptable to
Mercantile in its sole and absolute discretion.
The provisions of subparts (ii) and (v) above shall not apply with respect to
the Bond Letter of Credit.
(b) The acceptance or payment of drafts under
each Letter of Credit shall be made in accordance with the terms thereof and,
in that connection, Mercantile shall be entitled to honor any drafts and accept
any documents presented to it by the beneficiary of such Letter of Credit in
accordance with the terms of such Letter of Credit and believed by Mercantile
to be genuine. Mercantile shall not have any duty to inquire as to the
accuracy or authenticity of any draft or other drawing document that may be
presented to it other than the duties contemplated by the applicable Letter of
Credit Application. If Mercantile shall have received documents that in its
judgment constitute all of the documents that are required to be presented
before payment or acceptance of a draft under a Letter of Credit issued by it,
it shall be entitled to pay or accept such draft provided such documents
conform on their face to the requirements of such Letter of Credit.
(c) In the event of any payment by Mercantile of
a draft presented or accepted under a Letter of Credit, Borrower agrees to pay
to Mercantile in immediately available funds at the time of such drawing an
amount equal to the sum of such drawing plus Mercantile's negotiation,
processing and other fees related thereto. Borrower hereby authorizes
Mercantile to charge or cause to be charged Borrower's bank accounts at
Mercantile to the extent there are balances of immediately available funds
therein, in an amount equal to the sum of such drawing plus Mercantile's
negotiation, processing and other fees related thereto, and Borrower agrees to
pay the amount of any such drawing (and/or Mercantile's negotiation, processing
and other fees related thereto) not so charged prior to the close of business
of such Bank on the day of such drawing. In the event any payment under a
Letter of Credit is made by Mercantile without same day receipt of payment from
Borrower, such payment by Mercantile shall constitute a loan (a "Letter of
Credit Loan") by such Bank to Borrower, payable on demand of such Bank.
Borrower agrees to pay interest on demand of Mercantile on any unpaid Letter of
Credit Loan at a rate per annum equal to the Base Rate, calculated on an actual
day, 360-day year basis, until such Letter of Credit Loan is paid in full.
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(d) Borrower hereby further agrees to pay to the
order of Mercantile:
(i) with respect to each standby Letter of Credit
issued by Mercantile after the date hereof, a nonrefundable issuance
fee in the amount of One Hundred Twenty-Five Dollars ($125.00) for the
issuance of each such standby Letter of Credit, and with respect to
each commercial Letter of Credit issued by Mercantile after the date
hereof, a nonrefundable issuance fee in the amount of Thirty-Five
Dollars ($35.00) for the issuance of each such commercial Letter of
Credit (the "Letter of Credit Issuance Fees"), which Letter of Credit
Issuance Fee shall be due and payable on the date of issuance of each
such Letter of Credit;
(ii) with respect to each standby Letter of Credit
(including the Bond Letter of Credit), a nonrefundable commitment fee
in an amount equal to the rate per annum equal to the then current
Applicable Margin for LIBOR Loans (calculated on an actual day,
360-day year basis) times the face amount (taking into account any
scheduled increases or decreases therein during the period in
question) of each such Letter of Credit issued hereunder ("Letter of
Credit Commitment Fee"), which Letter of Credit Commitment Fee shall
be due and payable in advance on the date of issuance of such Letter
of Credit and on each renewal date of such Letter of Credit, and a pro
rata portion of any such Letter of Credit Commitment Fee shall be
refunded to the Borrower for any standby Letter of Credit terminated
or fully drawn upon prior to its expiry date based upon its remaining
term to such expiry date as compared to its then current term from the
date it was last issued or renewed;
(iii) with respect to each draw under any
commercial Letter of Credit, a nonrefundable negotiation fee in an
amount equal to three-eighths of one percent (.375%) times the amount
of such draw under each such commercial Letter of Credit issued
hereunder, but not less than $45.00 for any one draw or $55.00 for any
one commercial Letter of Credit (the "Letter of Credit Negotiation
Fee"), which Letter of Credit Negotiation Fee shall be due and payable
on the date of any such draw of such commercial Letter of Credit; and
(iv) with respect to each Letter of Credit, such
other fees as may be charged by Mercantile from time to time in
accordance with Mercantile's published schedule of fees in effect from
time to time, which fees shall be due and payable on demand by
Mercantile.
4.2 Participation by Other Banks. Upon the issuance of a
Letter of Credit by Mercantile, including, without limitation, the Bond Letter
of Credit, an undivided participation interest therein (including, without
limitation, an undivided participation interest in the reimbursement risk
relating to such Letter of Credit and in all payments and Letter of Credit
Loans made by Mercantile in connection with such Letter of Credit) shall
automatically be granted by Mercantile to and accepted by each of the other
Banks in an amount based on each such other Bank's Pro Rata Share of the face
amount of such Letter of Credit, which
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participation shall be evidenced by a single Letter of Credit Participation
Certificate executed by Mercantile in favor of such Bank in the form attached
hereto as Exhibit G and incorporated herein by reference. If Mercantile shall
make payment on any draft presented or accepted under a Letter of Credit, such
Bank shall give notice of such payment to the other Banks, and each of the
other Banks hereby authorizes and requests Mercantile to advance for their
respective accounts, pursuant to the terms hereof, their respective shares of
any such payment based upon their respective Pro Rata Shares. If such drawing
is not paid by Borrower in immediately available funds prior to the close of
business of Mercantile on the date of such drawing, Mercantile shall promptly
so notify the other Banks and each of the other Banks agrees to immediately
reimburse Mercantile in immediately available funds for its Pro Rata Share of
the amount of such drawing, plus interest calculated on its Pro Rata Share of
such amount at a rate per annum equal to the Base Rate calculated from the date
of such payment by Mercantile to but excluding the date of reimbursement by
such other Bank and on an actual-day, 360-day year basis. Following such
advance by each Bank to Mercantile of its Pro Rata Share of any such Letter of
Credit Loan pursuant to the preceding sentence, each such Bank shall thereafter
receive its Pro Rata Share of all interest and other amounts due with respect
to such Letter of Credit Loan when paid by the Borrower to the Agent hereunder.
Each of the other Banks will be entitled to its Pro Rata Share of any Letter of
Credit Commitment Fees paid by Borrower (which shall be paid through the Agent
under Section 4.1(d)), but such other Banks shall have no right to share in any
Letter of Credit Issuance Fees, Letter of Credit Negotiation Fees or any other
fees paid by Borrower to Mercantile in connection with any of the Letters of
Credit.
4.3 Replacement or Collateralization of Letters of
Credit. Notwithstanding any provision contained in this Agreement or any of
the Letter of Credit Applications to the contrary, upon the occurrence of any
Event of Default under this Agreement, at Mercantile's option and without
demand or further notice to Borrower, an amount equal to the aggregate undrawn
face amount of all Letter(s) of Credit then outstanding shall be deemed (as
between Mercantile and Borrower) to have been paid or disbursed by Mercantile
(notwithstanding that such amounts may not in fact have been so paid or
disbursed by Mercantile), and a Letter of Credit Loan to Borrower in such
amount to have been made and accepted by Borrower, which Letter of Credit Loan
shall be immediately due and payable. In lieu of the foregoing, at the
election of Mercantile, Borrower shall, upon Mercantile's demand, deliver to
Mercantile cash or other collateral acceptable to Mercantile, in its sole and
absolute discretion, having a value, as determined by Mercantile, at least
equal to aggregate undrawn face amount of all outstanding Letters of Credit.
Any such collateral and/or any amounts received by Mercantile in payment of any
Letter of Credit Loan made pursuant to this Section 4.3 shall be held by
Mercantile in a separate account at Mercantile appropriately designated as a
cash collateral account in relation to this Agreement and the Letters of Credit
and retained by Mercantile as collateral security for the payment of the
Borrower's Obligations. Cash amounts delivered to Mercantile pursuant to the
foregoing requirements of this Section 4.3 shall be invested, at the request
and for the account of Borrower, in investments of a type and nature and with a
term acceptable to Mercantile. Such amounts, including in the case of cash
amounts invested in the manner set forth above, any investment realized
thereon, shall not be used by Mercantile to pay any amounts drawn or paid under
or pursuant to any Letter of Credit, but may be applied to reimburse Mercantile
for drawings or payments under or pursuant to the Letters of Credit which
Mercantile has paid, or if no such reimbursement is required shall be delivered
to the Agent for
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application to such other of Borrower's Obligations as Agent shall determine.
Any amounts remaining in any cash collateral account established pursuant to
this Section 4.3 after the payment in full of all of the Borrower's Obligations
and the expiration or cancellation of all of the Letters of Credit shall be
returned to Borrower (after deduction of Mercantile's expenses, if any).
SECTION 5. THE TERM LOAN.
5.1 Commitment of the Banks. Subject to the terms and
conditions set forth in this Agreement, the Banks severally agree, in
proportion to their respective Term Loan Commitments, to make Borrower a term
loan in the aggregate original principal amount of Sixty Million Dollars
($60,000,000.00) (the "Term Loan"). The Term Loan shall be advanced by the
Banks in two separate advances, the first of which shall have been made
pursuant to the Prior Agreement and, after the $30,000,000.00 prepayment on the
date hereof, is outstanding on the date hereof in the amount of $56,274,239.31;
and the second advance which shall be in the principal amount of $3,725,760.69,
which shall be made on October 1, 1996 pursuant to and subject to the terms of
Section 10.1(p) herein. The Term Loan may be either (a) a Base Rate Loan, (b)
a LIBOR Loan or (c) any combination thereof, as determined by the Borrower and
notified to the Agent in accordance with Section 6.1 herein, provided, however,
that the amount of any Base Rate Loan shall not be less than $1,500,000.00 or
multiples of $100,000.00 in excess thereof, and the amount of any LIBOR Loan
shall not be less than $2,500,000.00 or multiples of $250,000.00 in excess
thereof.
5.2 Term Notes.
(a) The Term Loan of each Bank to Borrower shall
be evidenced by an Amended and Restated Term Note of Borrower dated the date
hereof and payable to the order of such Bank in a principal amount equal to its
Term Loan Commitment in substantially the form of Exhibit C attached hereto
(with appropriate insertions) (as the same may from time to time be amended,
modified extended or renewed, the "Term Notes"). The Term Notes shall mature
on September 30, 2000 (on which date all unpaid principal and all accrued and
unpaid interest shall become due and payable). Principal on the Term Loan
shall be payable by Borrower to Agent for distribution to each of the Banks in
seventeen (17) consecutive quarterly principal installments payable on the last
day of each March, June, September and December prior to maturity, as follows:
two (2) equal consecutive quarterly principal installments in the amount of Two
Million Five Hundred Thousand Dollars ($2,500,000.00) each, due and payable
commencing September 30, 1996, followed by four (4) equal consecutive quarterly
principal installments in the amount of Three Million One Hundred Twenty-Five
Thousand Dollars ($3,125,000.00) each, due and payable commencing March 31,
1997, followed by eight (8) equal consecutive quarterly principal installments
in the amount of Three Million Five Hundred Thousand Dollars ($3,500,000.00)
each, due and payable commencing March 31, 1998, followed by two (2) equal
consecutive quarterly principal installments in the amount of Four Million
Three Hundred Seventy-Five Thousand Dollars ($4,375,000.00) each, due and
payable commencing March 31, 2000, with the seventeenth (17th) and final
installment in the amount of the then outstanding principal balance under the
Term Loan due and payable on September 30, 2000. Interest on the outstanding
principal balance of the Term Notes shall be calculated
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and paid as provided for under Section 6.2 and at the maturity of the Term
Notes, whether by reason of acceleration or otherwise.
(b) Upon receipt of each Bank's Term Note
pursuant to Section 5.2(a), the Agent shall mail such Term Note by certified
mail, return receipt requested, to such Bank. Each Bank shall record, and
prior to any transfer of its Term Note shall endorse on the schedules forming a
part thereof, appropriate notations to evidence (i) the date and amount of each
conversion of any portion of the Term Loan to a LIBOR Loan and the principal
amount, applicable LIBOR Rate, and the applicable Interest Period with respect
thereto, and (ii) the date and amount of each payment of principal made by
Borrower with respect to the Term Loan. Each Bank is hereby irrevocably
authorized by Borrower so to endorse its Term Note and to attach to and make a
part of any such Term Note a continuation of any such schedule as and when
required; provided, however that the obligation of Borrower to repay the Term
Loans made by Banks hereunder shall be absolute and unconditional,
notwithstanding any failure of any Bank to endorse or any mistake by any Bank
in connection with endorsement on the schedules attached to its respective Term
Note. The books and records of each Bank (including, without limitation, the
schedules attached to the Term Notes) showing the account between such Bank and
Borrower shall be admissible in evidence in any action or proceeding and shall
constitute prima facie proof of the items therein set forth.
5.3 Mandatory Prepayments From Excess Cash Flow. In
addition to the regularly scheduled principal payments set forth in Section
5.2(a) above, Borrower further agrees to pay to Agent on behalf of Banks as a
mandatory prepayment against the Term Loan principal balance on each April 30
during the Term hereof, (a) for each year following a determination of
Borrower's Ratio of Consolidated Total Debt to Consolidated EBITDA as of the
preceding December 31 where such ratio remains greater than or equal to 4.0 to
1.0, an amount equal to seventy-five percent (75%) of Excess Cash Flow, (b) for
each year following a determination of Borrower's Ratio of Consolidated Total
Debt to Consolidated EBITDA as of the preceding December 31 where such ratio
shall have been reduced to less than 4.0 to 1.0 but such ratio remains greater
than or equal to 3.0 to 1.0, an amount equal to fifty percent (50%) of Excess
Cash Flow, and (c) for each year following a determination of Borrower's Ratio
of Consolidated Total Debt to Consolidated EBITDA as of the preceding December
31 where such ratio shall have been reduced to less than 3.0 to 1.0, an amount
equal to twenty-five percent (25%) of Excess Cash Flow, with such Excess Cash
Flow determined in each case for Borrower's immediately preceding fiscal year
by reference to Borrower's audited year-end financial statements for such
preceding fiscal year (the first such mandatory prepayment due on April 30,
1997 for Borrower's Excess Cash Flow for its fiscal year ending December 31,
1996). Such annual mandatory prepayments from Excess Cash Flow shall be
applied by the Banks in accordance with their respective Pro Rata Shares,
ratably, to the remaining installments of principal (including any balloon
payment at maturity) due under their respective Term Notes, with such payments
being applied, prior to the occurrence of a Default or Event of Default to the
Base Rate Loans and LIBOR Loans in such order as Borrower shall determine, or
after the occurrence of a Default or Event of Default hereunder such payments
shall be applied, subject to Section 11 herein, first, to any portion of the
Term Loans outstanding as Base Rate Loans, and second, to that portion of the
Term Loans which are LIBOR Loans, provided, however, that for any repayment
applied to LIBOR Loans (whether before or after the occurrence of any
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Default or Event of Default), Borrower (i) shall pay to Banks any amounts due
under Section 6.6 herein with regard to repayment of such LIBOR Loan, and (ii)
if any such payment shall repay in full the outstanding principal balance of
any LIBOR Loan, all accrued and unpaid interest on such LIBOR Loan shall also
be due and payable on such date.
5.4 Mandatory Prepayment From Equity Offerings. In the
event Borrower or any Subsidiary issues on any date after the date hereof
equity securities in any public offering or pursuant to any private placement
(other than pursuant to the warrants issued or intended to be issued in
connection with the 14.25% Senior Exchangeable Preferred Stock Due 2007 and
permitted refinancings thereof), no later than the third Domestic Business Day
following the date of receipt of the proceeds from any sale of such equity
securities (other than: (i) proceeds of the issuance of the 14.25% Senior
Exchangeable Preferred Stock Due 2007 and other sales of capital stock of
Borrower received on or before October 5, 1995, (ii) proceeds, if any, from the
issuance of common stock of Borrower to members of the management of Borrower
or its Subsidiaries or officers, directors, employees or consultants of any of
them; (iii) proceeds from the issuance of equity securities to Borrower or any
Subsidiary of Borrower by any Person that was a Subsidiary of Borrower or such
Subsidiary immediately prior to such issuance; and (iv) proceeds constituting
equity contributions by Borrower or any of its Subsidiaries to one of its
Subsidiaries), Borrower shall prepay the Term Loans in an amount equal to the
lesser of:
(x) seventy-five percent (75%), if Borrower's ratio of
Consolidated Senior Secured Debt to Consolidated EBITDA as determined
pursuant to Section 10.1(m)(iv) by reference to Borrower's most recent
quarter-end or year-end financial statements delivered pursuant to
Section 10.1(a) is greater than or equal to 1.00 to 1.0, or fifty
percent (50%), if such ratio is less than 1.0 to 1.0, of the cash
amount of such proceeds, net of underwriting discounts and
commissions, all due diligence costs and expenses paid for or
reimbursed by the issuer or any of its Subsidiaries, all attorneys'
fees paid for by or reimbursed by the issuer or its Subsidiaries, and
other reasonable costs associated therewith, or
(y) the outstanding principal amount of the Term Loans together
with all accrued and unpaid interest and fees due thereon.
Provided no Default or Event of Default then exists hereunder, the remainder of
any such proceeds may be used by Borrower to redeem its 14.25% Senior
Exchangeable Preferred Stock Due 2007 in accordance with the terms thereof. In
the event Borrower does not elect to use the remaining portion of the net
equity offering proceeds described in subpart (x) above to redeem or repurchase
its outstanding 14.25% Senior Exchangeable Preferred Stock Due 2007 on or
before the third Domestic Business Day following the date of receipt of the
proceeds from any such equity offering, then such proceeds shall also be used
to prepay the Term Loans of Borrower. Prepayments made under this Section 5.4
shall be applied to the Term Loans in the same manner as set forth in Section
5.3 above.
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SECTION 6. GENERAL PROVISIONS FOR ALL LOANS.
6.1 Duration of Interest Periods and Selection of
Interest Rates.
(a) The commencement date and duration of the
initial Interest Period for each LIBOR Loan shall be (i) with respect to a
Revolving Credit Loan, as specified in the applicable Notice of Borrowing for
such Revolving Credit Loan, and (ii) with respect to any portion of the Term
Loan, as specified by Borrower in an irrevocable notice to Agent given by 11:00
a.m. (St. Louis time) at least two (2) Eurodollar Business Days before any such
conversion to the LIBOR Rate. Borrower shall elect the duration of each
subsequent Interest Period applicable to such LIBOR Loan, and the interest rate
to be applicable during such subsequent Interest Period (and Borrower shall
have the option (x) in the case of any Base Rate Loan, to elect that such Loan
become a LIBOR Loan and the Interest Period to be applicable thereto or (y) in
the case of any LIBOR Loan, to elect that such Loan become a Base Rate Loan),
by giving notice of such election to the Agent by 11:00 a.m. (St. Louis time)
on the day of, in the case of the election of the Base Rate, by 11:00 a.m. (St.
Louis time) at least two (2) Eurodollar Business Days before, in the case of
the election of the LIBOR Rate, the end of the immediately preceding Interest
Period applicable thereto, if any; provided, however, that notwithstanding the
foregoing, in addition to and without limiting the rights and remedies of the
Agent and the Banks under Section 11 hereof, so long as any Default or Event of
Default under this Agreement has occurred and is continuing, Borrower shall not
be permitted to renew any LIBOR Loan as a LIBOR Loan or to convert any Base
Rate Loan into a LIBOR Loan. By 12:00 noon (St. Louis time) on the date of
receipt of each such notice of conversion or continuation of a Loan from
Borrower, Agent shall notify each Bank of the contents thereof and of such
Bank's ratable share of such Loan. A notice by Borrower under this Section
6.1(a) shall not be revocable by Borrower. All LIBOR Loans, whether by
conversion or by an advance, shall be in a principal amount of at least
$2,500,000.00 or multiples of $250,000.00 in excess thereof. All Loans which
bear interest at a particular LIBOR Rate for a particular Interest Period shall
constitute a single LIBOR Loan. Borrower may not have outstanding and Banks
shall not be obligated to make more than five (5) LIBOR Loans at any one time.
(b) If the Agent does not receive a notice of
election for the continuation of a LIBOR Loan for a subsequent Interest Period
pursuant to subsection (a) above within the applicable time limits specified
therein, Borrower shall be deemed to have elected to convert such LIBOR Loan on
the last day of the current Interest Period with respect thereto to a Base Rate
Loan in the principal amount of such expiring LIBOR Loan on such date.
(c) Notwithstanding the foregoing, the duration
of each Interest Period shall be subject to the provisions of the definition of
Interest Period.
(d) Borrower hereby authorizes the Agent to rely
on telephonic, telegraphic, telecopy, telex or written instructions believed by
the Agent in good faith to have been sent or delivered by any person
identifying himself or herself as R. Xxxx Xxxx, Xxx X. Xxxxxxxx or Xxxxx Xxxx
(or any other person from time to time authorized to act on behalf of Borrower
pursuant to a resolution adopted by the Board of Directors of Borrower and
certified by the Secretary of Borrower and delivered to the Agent) with respect
to any request to make
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a Loan or a repayment hereunder, or to convert any Base Rate Loan or LIBOR Loan
to any other type of Loan available hereunder, and on any signature which the
Agent in good faith believes to be genuine. Borrower shall be bound thereby in
the same manner as if such person were actually authorized or such signature
were genuine. Borrower also hereby agrees to indemnify the Agent and each of
the Banks and to hold the Agent and each of the Banks harmless from and against
any and all claims, demands, damages, liabilities, losses, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
relating to or arising out of or in connection with the acceptance of
instructions for making or converting Loans or making repayments hereunder.
6.2 Interest Rates; Interest Payments.
(a) Each Base Rate Loan shall bear interest on
the outstanding principal amount thereof, for each day from the date such Loan
is made until it becomes due, at a rate per annum equal to the Base Rate. Such
interest shall be payable on all Loans quarterly in arrears on the last day of
each calendar quarter, commencing on the first such date after such Base Rate
Loan is made, and at maturity. Any overdue principal of and, to the extent
permitted by law, overdue interest on, any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the sum
of two percent (2%) plus the rate otherwise in effect for such day.
(b) Each LIBOR Loan shall bear interest on the
outstanding principal amount thereof for each Interest Period applicable
thereto at a rate per annum equal to the applicable LIBOR Rate; provided that
if any LIBOR Loan or any portion thereof shall, as a result of clause (iv) of
the definition of Interest Period, have an Interest Period of less than 30
days, such portion shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Interest shall be payable
for each Interest Period on the last day thereof, unless the duration of the
applicable Interest Period exceeds three (3) months, in which case such
interest shall be payable at the end of the first three (3) months of such
Interest Period and on the last day of such Interest Period. Any overdue
principal of and, to the extent permitted by law, overdue interest on, any
LIBOR Loan shall bear interest, payable on demand, for each day until paid, at
a rate per annum equal to the sum of two percent (2%) plus the higher of (i)
the LIBOR Rate for the immediately preceding Interest Period applicable to such
LIBOR Loan or (ii) the rate applicable to Base Rate Loans for such day.
(c) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give prompt notice to
Borrower and the Banks by telecopy, telex or cable of each rate of interest so
determined, and its determination thereof shall be conclusive in the absence of
manifest error. Any change in the Base Rate shall become effective as of the
opening of business on the day on which such change in the Base Rate shall
occur.
6.3 Fees.
(a) Borrower shall pay to Agent for the account
of the Banks, in arrears, on the fifteenth (15th) day of each calendar quarter
during the Revolving Credit Period and on the last day of the Revolving Credit
Period, commencing with the first such payment on
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April 15, 1996 for the calendar quarter ending March 31, 1996, a commitment fee
(the "Commitment Fee") determined as set forth herein. For the Commitment Fee
payments due hereunder on April 15, 1996, July 15, 1996 and October 15, 1996,
the Commitment Fee shall be equal to three-eighths of one percent (.375%) per
annum calculated on the basis of the unused Revolving Credit Commitments of all
of the Banks during the preceding calendar quarter, or portion thereof, which
unused Revolving Credit Commitments shall be arrived at by dividing the sum of
the unused Revolving Credit Commitments of the Banks for each day of that
quarter as of the close of each day, by 90. For purposes of calculating the
Commitment Fee due April 15, 1996 under the Prior Agreement, the definition of
Revolving Credit Commitments under the Prior Agreement shall apply for the
period from January 1, 1996 up to and including the date of this Agreement, and
such commitment fee shall be allocated among the Banks as provided in the Prior
Agreement. Commencing with the Commitment Fee payment due January 15, 1997 for
the calendar quarter ending December 31, 1996 and for each Commitment Fee
payment due fifteen days after each calendar quarter end thereafter during the
Revolving Credit Period and on the last day of the Revolving Credit Period:
(i) if Borrower's ratio of Consolidated Total Debt to Consolidated EBITDA (as
determined pursuant to Section 10.1(m)(iii)) as of the end of the calendar
quarter immediately preceding the calendar quarter for which such Commitment
Fee is to be calculated (i.e., for purposes of determining the Commitment Fee
amount for the calendar quarter ending December 31, 1996, such ratio shall be
determined for the quarter ending September 30, 1996) is greater than or equal
to 4.65 to 1.0, the Commitment Fee payable by Borrower shall be equal to
one-half of one percent (.50%) per annum on the unused Revolving Credit
Commitments of all of the Banks during such calendar quarter, (ii) if
Borrower's ratio of Consolidated Total Debt to Consolidated EBITDA (as
determined pursuant to Section 10.1(m)(iii)) as of the end of the calendar
quarter immediately preceding calendar quarter for which such Commitment Fee is
to be calculated is less than 4.65 to 1.0 but greater than or equal to 4.05 to
1.0, the Commitment Fee payable by Borrower shall be equal to Three- Eighths of
One Percent (.375%) per annum on the unused Revolving Credit Commitments of all
of the Banks during such calendar quarter, or (iii) if Borrower's ratio of
Consolidated Total Debt to Consolidated EBITDA (as determined pursuant to
Section 10.1(m)(iii)) as of the end of the calendar quarter immediately
preceding the calendar quarter for which such Commitment Fee is to be
calculated is less than 4.05 to 1.0, the Commitment Fee payable by Borrower
shall be equal to One-Fourth of One Percent (.25%) per annum on the unused
Revolving Credit Commitments of all of the Banks during such calendar quarter.
Upon receipt, Agent shall promptly pay each Bank its Pro Rata Share of any such
Commitment Fee paid by Borrower. The unused Revolving Credit Commitments shall
be defined as the total of (x) the Revolving Credit Commitments of all of the
Banks, minus (y) (1) all outstanding Revolving Credit Loans, plus (2) all
outstanding Swing Loans, plus (3) all outstanding Letter of Credit Loans (other
than a Letter of Credit Loan made with respect to the Bond Letter of Credit),
plus (4) the aggregate undrawn face amount of all outstanding Letters of Credit
(other than the Bond Letter of Credit).
(b) Borrower agrees to pay to Agent at closing an
amendment fee in the amount of Three Hundred Eighteen Thousand Seven Hundred
Fifty Dollars ($318,750.00), which amendment fee shall be paid by Agent to the
Banks in accordance with their respective Pro Rata Shares.
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(c) Borrower shall also pay to the Agent for its
own account a nonrefundable agent's fee and an arrangement fee in the amounts
and at the times set forth in a letter agreement dated October 5, 1995 by and
between Borrower and the Agent.
6.4 Early Payments.
(a) Borrower may, upon notice to the Agent
specifying that it is paying its Revolving Credit Loans which are Base Rate
Loans, pay without penalty or premium such Base Rate Loans in whole at any
time, or from time to time in part in amounts aggregating $1,500,000.00, or any
larger multiple of $100,000.00; provided, however, that in no event may
Borrower make a partial payment of Base Rate Loans which results in the total
outstanding Revolving Credit Loans which are Base Rate Loans being greater than
zero but less than $1,500,000.00. Each such optional payment shall be applied
to pay the Base Rate Loans of the several Banks in proportion to their
respective Revolving Credit Commitments.
(b) Borrower may, upon at least one (1)
Eurodollar Business Day's notice to the Agent specifying that it is paying its
Revolving Credit Loans which are LIBOR Loans, pay without penalty or premium on
the last day of any Interest Period its LIBOR Loans to which such Interest
Period applies, in whole, or in part in amounts aggregating $2,500,000.00 or
any larger multiple of $250,000.00, by paying the principal amount to be paid
together with all accrued and unpaid interest thereon to and including the date
of payment; provided, however, that in no event may Borrower make a partial
payment of LIBOR Loans which results in the total outstanding Revolving Credit
Loans which are LIBOR Loans with respect to which a given Interest Period
applies being greater than zero but less than $2,500,000.00. Each such
optional payment shall, subject to Section 6.6, be applied to pay such LIBOR
Loans of the several Banks in proportion to their respective Revolving Credit
Commitments.
(c) Borrower may, upon notice to the Agent
specifying that it is paying its Term Loans which are Base Rate Loans, pay
without penalty or premium such Base Rate Loans in whole at any time, or from
time to time in part in amounts aggregating $1,500,000.00 or any larger
multiple of $100,000.00, by paying the principal amount to be paid together
with all accrued and unpaid interest thereon to and including the date of
payment; provided, however, that in no event may Borrower make a partial
payment of Base Rate Loans which results in the total outstanding Term Loans
which are Base Rate Loans being greater than zero but less than $1,500,000.00.
Each such optional payment shall be applied to pay the Base Rate Loans of the
several Banks in proportion to their respective Term Loan Commitments.
(d) Borrower may, upon at least one (1)
Eurodollar Business Day's notice to the Agent specifying that it is paying its
Term Loans which are LIBOR Loans, pay without penalty or premium on the last
day of any Interest Period its LIBOR Loans to which such Interest Period
applies, in whole, or in part in amounts aggregating $2,500,000.00 or any
larger multiple of $250,000.00, by paying the principal amount to be paid
together with all accrued and unpaid interest thereon to and including the date
of payment; provided, however, that in no event may Borrower make a partial
payment of LIBOR Loans which results in the total outstanding Term Loans which
are LIBOR Loans with respect to which a given Interest Period applies being
greater than zero but less than $2,500,000.00. Each such optional payment
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shall, subject to Section 6.6, be applied to pay such LIBOR Loans of the
several Banks in proportion to their respective Term Loan Commitments.
(e) Upon receipt of a notice of payment pursuant
to any of Sections 6.4(a) through (d) above, the Agent shall promptly notify
each Bank of the contents thereof and of such Bank's ratable share of such
payment and such notice shall not thereafter be revocable by Borrower. Partial
prepayments of Borrower's Term Loans pursuant to (c) and (d) above shall be
applied ratably in accordance with each Bank's Pro Rata Share thereof ratably
to the remaining installments of principal (including any balloon payment at
maturity) due under the Term Notes. Amounts prepaid on account of the Term
Loan may not be reborrowed.
(f) Borrower may, upon notice to the Agent
specifying that it is paying its Swing Loan, pay without penalty or premium
such Swing Loan in whole at any time, or in part from time to time.
6.5 General Provisions as to Payments. Borrower shall
make each payment of principal of, and interest on, the Loans and of fees and
all other amounts payable hereunder, not later than 12:00 noon (St. Louis time)
on the date when due (2:00 p.m. (St. Louis Time) in the case of payments on the
Swing Loans), in Federal or other funds immediately available in St. Louis,
Missouri, to the Agent at its address referred to in Section 13.7. The Agent
will promptly distribute to each Bank in immediately available funds its
ratable share of each such payment received by the Agent for the account of the
Banks, provided, however, that except as provided in Section 3.7 above,
payments of principal, interest and fees with respect to the Swing Line Note
and the Swing Line Commitment shall be retained by Mercantile for its own
account. Whenever any payment of principal of, or interest on, the Loans or of
fees shall be due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic Business Day,
except that in the case of LIBOR Loans such payment dates shall be subject to
the definition of Interest Period. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon, at the then
applicable rate, shall be payable for such extended time.
6.6 Funding Losses. Notwithstanding any provision
contained herein to the contrary, if Borrower makes any payment of principal
with respect to any LIBOR Loan (pursuant to Sections 3.1, 5.1, 6.4, 11 or
otherwise) on any day other than the last day of the Interest Period applicable
thereto, or if Borrower fails to borrow or pay any LIBOR Loan after notice has
been given to the Agent in accordance with Section 3.3, 6.1 or 6.4(b) or (e),
Borrower shall reimburse each Bank on demand for any resulting losses and
expenses incurred by it, including, without limitation, any losses incurred in
obtaining, liquidating or employing deposits from third parties, but excluding
loss of margin for the period after any such payment, provided that such Bank
shall have delivered to Borrower a certificate as to the amount of such losses
and expenses, which certificate shall be conclusive in the absence of manifest
error.
6.7 Basis for Determining Interest Rate Inadequate or
Unfair. If with respect to any Interest Period:
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(a) the Agent is advised by any Bank that
deposits in dollars (in the applicable amounts) are not being offered to such
Bank in the relevant market for such Interest Period, or
(b) any Bank advises the Agent that the LIBOR
Rate as determined by the Agent will not adequately and fairly reflect the cost
to such Bank of maintaining or funding its LIBOR Loans for such Interest
Period,
the Agent shall forthwith give notice thereof to Borrower and the Banks,
whereupon until the Agent notifies Borrower that the circumstances giving rise
to such suspension no longer exist, (a) the obligations of the Banks to make
LIBOR Loans shall be suspended, and (b) Borrower shall repay in full the then
outstanding principal amount of each of its LIBOR Loans together with all
accrued and unpaid interest thereon, on the last day of the then current
Interest Period applicable to such Loan, or convert the then outstanding
principal amount of each of its LIBOR Loans to a Base Rate Loan on the last day
of the then current Interest Period applicable to each such LIBOR Loan.
6.8 Illegality. If, after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or any change therein,
or any change in the interpretation or administration thereof by any
governmental or regulatory authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Bank
with any request or directive (whether or not having the force of law) of any
such governmental or regulatory authority, central bank or comparable agency
shall make it unlawful or impossible for any Bank to make, maintain or fund its
LIBOR Loans to Borrower and such Bank shall so notify the Agent, the Agent
shall forthwith give notice thereof to the other Banks and Borrower. Upon
receipt of such notice, Borrower shall repay in full the then outstanding
principal amount of each of its LIBOR Loans from such Bank, together with all
accrued and unpaid interest thereon, on either (a) the last day of the then
current Interest Period applicable to such LIBOR Loan if such Bank may lawfully
continue to maintain and fund such LIBOR Loan to such day or (b) immediately if
such Bank may not lawfully continue to fund and maintain such LIBOR Loan to
such day. Concurrently with repaying each LIBOR Loan of such Bank, Borrower
may borrow a Base Rate Loan in an equal principal amount from such Bank, and,
if Borrower so elects, such Bank shall make such a Base Rate Loan to Borrower.
6.9 Increased Cost.
(a) If after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental or regulatory
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank with any request or directive
(whether or not having the force of law) of any such governmental or regulatory
authority, central bank or comparable agency (a "Regulatory Change"):
(A) shall subject any Bank to any tax, duty or
other charge with respect to its LIBOR Loans, its Notes or its
obligation to make LIBOR Loans hereunder, or shall change the basis of
taxation of payments to any Bank of the
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principal of or interest on its LIBOR Loans or any other amounts due
under this Agreement in respect of its LIBOR Loans or its obligation
to make LIBOR Loans (except for taxes on or changes in the rate of tax
on the overall net income of such Bank); or
(B) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed by the
Board of Governors of the Federal Reserve System), special deposit,
capital or similar requirement against assets of, deposits with or for
the account of, or credit extended or committed to be extended by, any
Bank or shall, with respect to any Bank or the Interbank Eurodollar
market, impose, modify or deem applicable any other condition
affecting its LIBOR Loans, its Notes or its obligation to make LIBOR
Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D, to impose a cost on or increase the cost to) such Bank of
making or maintaining any LIBOR Loan, or to reduce the amount of any sum
received or receivable by such Bank under this Agreement or under its Notes
with respect thereto, by an amount deemed by such Bank, in its good faith
judgment, to be material, and if such Bank is not otherwise fully compensated
for such increase in cost or reduction in amount received or receivable by
virtue of the inclusion of the reference to "LIBOR Reserve Percentage" in the
calculation of the interest rate applicable to LIBOR Loans, then, within
fifteen (15) days after notice by such Bank to Borrower together with a copy of
the official notice of the applicable change in law (if applicable) and a work
sheet showing how the change in cost or reduction or increase in amount
received or receivable was calculated (with a copy to the Agent and all of the
other Banks), Borrower shall pay for the account of such Bank as additional
interest, such additional amount or amounts as will compensate such Bank for
such increased cost or reduction. Each Bank will promptly notify Borrower, the
Agent and all of the other Banks of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Bank to compensation
pursuant to this Section. The determination by any Bank under this Section of
the additional amount or amounts to be paid to it hereunder shall be conclusive
in the absence of manifest error. In determining such amount or amounts, such
Bank may use any reasonable averaging and attribution methods.
(b) If any Bank demands compensation under this
Section, Borrower may at any time, upon at least two (2) Domestic Business
Days' prior notice to such Bank and the Agent, repay in full its then
outstanding LIBOR Loans, as the case may be, of such Bank, together with all
accrued and unpaid interest thereon to the date of prepayment and any funding
losses and other amounts due under Section 6.6. Concurrently with repaying
such LIBOR Loans of such Bank, Borrower may borrow from such Bank a Base Rate
Loan in an amount equal to the aggregate principal amount of such LIBOR Loans,
and, if Borrower so elects, such Bank shall make such a Base Rate Loan to
Borrower.
6.10 Base Rate Loans Substituted for Affected LIBOR Loans.
If notice has been given by a Bank pursuant to Section 6.7 or 6.8 or by
Borrower pursuant to Section 6.9(b) requiring LIBOR Loans of any Bank to be
repaid, then, unless and until such Bank notifies Borrower that the
circumstances giving rise to such repayment no longer apply, all Loans which
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would otherwise be made by such Bank to Borrower as LIBOR Loans shall be made
instead as Base Rate Loans. Such Bank shall notify Borrower if and when the
circumstances giving rise to such repayment no longer apply.
6.11 Capital Adequacy. If, after the date of this
Agreement, any Bank shall have determined that the adoption of any applicable
law, rule, regulation or guideline regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental or regulatory authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by such Bank
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
or will have the effect of reducing the rate of return on such Bank's capital
in respect of its obligations hereunder to a level below that which such Bank
could have achieved but for such adoption, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy), then from
time to time Borrower shall pay to such Bank upon demand such additional amount
or amounts as will compensate such Bank for such reduction. All determinations
made by such Bank of the additional amount or amounts required to compensate
such Bank in respect of the foregoing shall be conclusive in the absence of
manifest error. In determining such amount or amounts, such Bank may use any
reasonable averaging and attribution methods.
6.12 Survival of Indemnities. All indemnities and all
provisions relating to reimbursement to any Bank of amounts sufficient to
protect the yield to such Bank with respect to the Loans, including, without
limitation, Sections 6.7, 6.8 and 6.9 hereof, shall survive the payment of the
Notes and the termination of this Agreement.
6.13 Discretion of Bank as to Manner of Funding.
Notwithstanding any provision contained in this Agreement to the contrary, each
of the Banks shall be entitled to fund and maintain its funding of all or any
part of its LIBOR Loans in any manner it elects, it being understood, however,
that for purposes of this Agreement all determinations hereunder (including,
without limitation, the determination of each Bank's funding losses and
expenses under Section 6.6) shall be made as if such Bank had actually funded
and maintained each LIBOR Loan through the purchase of deposits having a
maturity corresponding to the maturity of the applicable Interest Period
relating to the applicable LIBOR Loan and bearing an interest rate equal to the
applicable LIBOR Rate. Each Bank may, at its option, elect to make, fund or
maintain its Loans hereunder at the branches or offices specified on the
signature pages hereof or on any Assignment Agreement executed and delivered
pursuant to Section 13.15 hereof or at such other of its branches or offices as
such Bank may from time to time elect, provided that the Borrower shall not be
required to reimburse any Bank under any of the provisions of Section 6.6 for
any cost which such Bank would not have incurred but for changing its lending
or funding branch unless Borrower consents to such change.
6.14 Late Payment Fees. If Borrower fails to make any
scheduled payment of any principal of or interest on any Loan (but not
including any payment due upon acceleration of such Loans pursuant to Section
11 of this Agreement) within ten (10) days after the date the same shall become
due and payable, in addition to all of the other rights and remedies of the
Agent and the Banks under this Agreement and at law or in equity, Borrower
shall pay the
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47
Agent for the ratable benefit of the Banks on demand with respect to each such
late payment a late fee in an amount equal to the greater of $100.00 or five
percent (5%) of the amount of each such late payment.
6.15 Fixed Rate Option. In the event Borrower desires to
fix the interest rate at a rate other than the LIBOR Rate or for a period other
than those periods permitted under the definition of Interest Period, Borrower
may upon three (3) Domestic Business Days notice to the Agent request Agent to
poll the Banks as to the rate they will quote as a fixed rate for a portion of
the Term Loan or Revolving Credit Loans and for a period to be specified by
Borrower in such notice to Agent. Thereafter, Agent shall notify the Banks of
Borrower's request for a fixed rate quote, the amount of the Term Loan or
Revolving Credit Loans for which the rate is to be fixed, and the period for
which such interest rate is to be fixed. The Banks must unanimously agree to
the rate to be quoted as a fixed rate for such requested period and such
specified loan amount, and will communicate such rate to Agent no later than
two (2) Domestic Business Days prior to the proposed effective date of such
requested fixed rate loan conversion, which rate Agent shall thereafter
promptly quote to Borrower. Borrower must notify Agent by 11:00 a.m. (St.
Louis time) on the Domestic Business Day prior to the requested effective date
of such fixed rate loan as to whether Borrower shall accept or reject the fixed
rate quoted by Banks for the period and the loan amount requested in its
original notice to the Agent, and if accepted, Agent shall promptly so notify
the Banks, in which case on the following Domestic Business Day the portion of
the Term Loan or Revolving Credit Loan to be converted shall automatically be
converted to a Loan at the quoted fixed rate for the period requested by
Borrower. Any Loan for which the interest rate is fixed under this Section
6.15 shall be subject to such prepayment premiums and other terms as Banks
and/or Agent shall specify to Borrower in their rate quote prior to Borrower's
acceptance of any such fixed rate. In the event Banks cannot unanimously agree
as to the fixed rate to be quoted to Borrower, then the Agent shall so notify
the Borrower and no fixed rate option will be available hereunder at that time.
6.16 Computation of Interest. Interest on Base Rate Loans
hereunder shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day). Interest on LIBOR Loans shall be computed on the basis of a year of 360
days and paid for the actual number of days elapsed, calculated as to each
Interest Period from and including the first day thereof to but excluding the
last day thereof.
SECTION 1. PRECONDITIONS TO LOANS AND LETTERS OF CREDIT.
7.1 Term Loan, Initial Revolving Credit Loan, Initial
Swing Loan or Letter of Credit. Notwithstanding any provision contained herein
to the contrary, none of the Banks shall have any obligation to make the Term
Loan, the initial Revolving Credit Loan hereunder and Mercantile shall have no
obligation to make the initial Swing Loan hereunder or to issue the initial
Letter of Credit hereunder unless the Agent shall have received on the date
hereof:
(a) This Agreement and the Notes, each executed
by a duly authorized officer of Borrower;
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(b) The Amendments to Deeds of Trust, each
executed by a duly authorized officer of Borrower and in recordable form,
together with such assignments of leases, UCC-3 fixture filing amendments and
other documents as Agent and Banks may reasonably require in order to maintain
perfection of Agent's liens for the benefit of Banks on each of the real
properties owned by Borrower;
(c) The Amendment to Security Agreement, executed
by a duly authorized officer of Borrower, together with such UCC-3 amendments
and other documents as may be reasonably required by Agent and Banks in order
to maintain perfection of the security interest of Agent for the benefit of
Banks in all of the personal property assets of Borrower;
(d) The Amendment to Pledge Agreement, executed
by a duly authorized officer of DPC Acquisition Corp., together with the
original stock certificate(s) evidencing all of the issued and outstanding
shares of common stock in Borrower and such collateral schedules, stock powers
executed in blank, and other documents or agreements as Agent and Banks may
reasonably require in order to maintain perfection of Agent's first priority
security interest in all of the issued and outstanding shares of common stock
of Borrower for the benefit of each of the Banks;
(e) The Amendment to Collateral Assignment,
executed by a duly authorized officer of Borrower, together with such other
documents as may be reasonably required by Agent and Banks in order to maintain
perfection of the Collateral Assignment of all of Borrower's registered U. S.
patents and trademarks in favor of Agent for the benefit of the Banks;
(f) A copy of resolutions of the Board of
Directors of Borrower, duly adopted, which authorize the execution, delivery
and performance of this Agreement, the Notes, the Letter of Credit
Application(s) and the other Transaction Documents delivered at or prior to the
closing, certified by the Chief Executive Officer and the Secretary of
Borrower;
(g) A copy of the Certificate of Incorporation of
Borrower, including any amendments thereto, certified by the Secretary of State
of the State of Delaware;
(h) A copy of the Bylaws of Borrower, including
any amendments thereto, certified by the Secretary of Borrower;
(i) An incumbency certificate, executed by the
Secretary of Borrower, which shall identify by name and title and bear the
signatures of all of the officers of Borrower executing any of the Transaction
Documents delivered at or prior to the closing;
(j) Certificates of corporate good standing of
Borrower issued by the Secretaries of State of the States of Delaware,
Missouri, Iowa, California, Virginia, Alabama, Texas, Florida, South Carolina,
New York, Louisiana, Wisconsin, Ohio, Colorado and Kansas;
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(k) An opinion of counsel of Xxxxxx & Xxxxxx,
L.L.P, and an opinion of counsel of Xxxxxxx X. Xxxxxx, Xx., independent counsel
for Borrower, in the form of Exhibit H attached hereto and incorporated herein
by reference;
(l) Endorsements to Agent's ALTA Loan Policies
for each of Borrower's owned real property locations acknowledging the
recording of the Amendments to Deeds of Trust and of such policies' continuing
coverage.
(m) Surveys satisfying title insurer and ALTA
minimum standard detail requirements including improvements, utilities,
easements, rights-of-way, restrictions and building lines, adjacent streets and
flood plain certification for Borrower's real properties located in the States
of Alabama, Florida, South Carolina, Louisiana, Colorado, Kansas and the
Schifferdecker property in Joplin, Missouri.
(n) Search results of UCC filings, judgment
liens, tax liens and pending litigation with respect to Borrower showing that
Agent, for the benefit of each of the Banks, has a first priority security
interest in all of the Collateral and that there are no other liens affecting
the Collateral except for Permitted Liens;
(o) Such evidence as Banks shall require prior to
funding that the transaction does not violate any law, rule or regulation or
otherwise result in Banks' failing to receive any of the benefits contemplated
under this Agreement or any of the other Transaction Documents;
(p) Such evidence as Banks shall require prior to
funding that Borrower has sold its Senior Unsecured Notes for a gross
consideration of at least $160,000,000.00, and that such Senior Unsecured Notes
contain terms and agreements in favor of Agent and Banks which are in form and
substance acceptable to Agent and Banks;
(q) Prepayment of the Term Loan of the Banks
outstanding under the Prior Agreement in an amount sufficient to reduce the
outstanding principal balance of the Term Loan hereunder to an aggregate amount
of Sixty Million Dollars ($60,000,000.00);
(r) A Letter Agreement between DPC Acquisition
Corp. and the Agent pursuant to which DPC Acquisition Corp. shall agree that
the net proceeds of any public equity offering by DPC Acquisition Corp. of the
nature referred to in Section 5.4 shall be contributed to Borrower and applied
pursuant to Section 5.4;
(s) Payment of Agent's costs and expenses as
provided for in Section 13.3 and payment to Agent of the fees required under
Sections 6.3(b), (c) and (d) herein; and
(t) Such other agreements, documents, instruments
and certificates as Agent or any of the Banks may reasonably request.
Any one or more of the conditions set forth above which have
not been satisfied by Borrower on or prior to the date hereof shall not be
deemed permanently waived unless
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Agent and the Banks shall waive the same in a writing which expressly states
that the waiver is permanent, and, in all cases in which the waiver is not
stated to be permanent, Agent and the Banks may at any time subsequent thereto
insist upon compliance and satisfaction of any such condition as a condition to
any new Revolving Credit Loan advance and/or to the requested conversion of any
interest rate on any outstanding Loan hereunder, and Banks shall have no
obligation to make any such advance or to convert any such interest rate until
all such conditions have been satisfied.
7.2 All Loans. Notwithstanding any provision contained
herein to the contrary, none of the Banks shall have any obligation to make any
further Revolving Credit Loan hereunder, to advance any further amount under
the Term Loan or to convert any Loan to a LIBOR Loan or to extend any LIBOR
Loan for a new Interest Period, and Mercantile shall have no obligation to make
any further Swing Loan hereunder, unless:
(a) With respect to any new Revolving Credit Loan
advance, the Agent shall have received a Borrowing Notice for such Revolving
Credit Loan as required by Section 3.3;
(b) With respect to the advance of $3,725,760.69
to repay the outstanding principal balance of and accrued interest and
prepayment premiums on the bond indebtedness secured by Borrower's Pueblo,
Colorado plant and equipment, the Agent shall have received a payoff letter
from the holder(s) of any and all mortgages, deeds of trust, security interests
and other liens securing such bond indebtedness, together with such deeds of
release, UCC termination statements and other releases as Agent shall require,
and such title insurance commitments, endorsements and other agreements as
Agent shall reasonably request;
(c) With respect to any conversion of a Loan to
or continuation of any Loan as a LIBOR Loan, the Agent shall have received the
notice for such conversion or continuation as required by Section 6.1;
(d) On the date of and immediately after giving
effect to such Revolving Credit Loan, such Swing Loan, such Term Loan advance
or such interest rate conversion or extension, no Default or Event of Default
under this Agreement shall have occurred and be continuing;
(e) No change in the Properties, assets,
liabilities, business, operations, prospects, income or condition (financial or
otherwise) of Borrower and its Subsidiaries taken as a whole and having a
Material Adverse Effect shall have occurred since the date of this Agreement
and be continuing; and
(f) Except for subsequent changes consented to by
the Required Banks after the date hereof, all of the representations and
warranties of Borrower contained in this Agreement shall be true and correct in
all material respects on and as of the date of such Revolving Credit Loan, such
Swing Loan, such Term Loan advance or such interest rate conversion or
continuation as if made on and as of the date of such Revolving Credit Loan,
such Swing Loan, such Term Loan advance or such interest rate conversion or
continuation.
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Each request for a Revolving Credit Loan by Borrower
hereunder, each request for a Swing Loan by Borrower hereunder (including
automatic requests for Swing Loans pursuant to Section 3.3(d)), each request
for a further advance under the Term Loan by Borrower, and each request by
Borrower to convert any Loan to or continue any Loan as a LIBOR Loan shall be
deemed to be a representation and warranty by Borrower on the date of such
Revolving Credit Loan, such Term Loan advance or such conversion or
continuation, as the case may be, as to the facts specified in clauses (d), (e)
and (f) of this Section 7.2.
7.3 All Letters of Credit. Notwithstanding any provision
contained herein to the contrary, Mercantile shall have no obligation to issue
any Letter of Credit hereunder unless:
(a) Mercantile shall have received a Letter of
Credit Request for such Letter of Credit as required by Section 4.1(a);
(b) Mercantile shall have received a Letter of
Credit Application for such Letter of Credit as required by Section 4.1(a),
duly executed by an authorized officer of Borrower as account party;
(c) Borrower shall have complied with all of the
procedures and requirements set forth in Section 4.1;
(d) On the date of and immediately after the
issuance of such Letter of Credit, no Default or Event of Default under this
Agreement shall have occurred and be continuing;
(e) No change in the Properties, assets,
liabilities, business, operations, prospects, income or condition (financial or
otherwise) of Borrower and its Subsidiaries taken as a whole and having a
Material Adverse Effect shall have occurred since the date of this Agreement
and be continuing;
(f) All of the representations and warranties of
Borrower contained in this Agreement shall be true and correct in all material
respects on and as of the date of the issuance of such Letter of Credit as if
made on and as of the date of the issuance of such Letter of Credit; and
(g) Bank shall have received such other
documents, certificates and agreements as it may reasonably request.
Each request for the issuance of a Letter of Credit by Borrower hereunder shall
be deemed to be a representation and warranty by Borrower on the date of the
issuance of such Letter of Credit as to the facts specified in clauses (d), (e)
and (f) of this Section 7.3.
SECTION 8. COLLATERAL.
8.1 Deeds of Trust. In order to secure the payment when
due of Borrower's Obligations, Borrower has granted Agent for the benefit of
each of the Banks a first priority
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deed of trust or mortgage (subject to Permitted Liens) on all of Borrower's
owned real property (except as described on Schedule 8.1) and all improvements
now or hereafter located thereon, as evidenced by those certain Deeds of Trust
and Security Agreements or Mortgage and Security Agreements dated as of October
5, 1995 and executed by Borrower in favor of Agent for the benefit of each of
the Banks and as amended by those certain Amendments to Deeds of Trust executed
by and between Borrower and Agent (as so amended and as the same may from time
to time be further amended, modified, extended or renewed, the "Deeds of
Trust"). Each of said Deeds of Trust further grants a security interest
covering all personal property relating to said real property and improvements.
Borrower covenants and agrees that it will execute any and all additional
documentation as may from time to time be requested by Agent or the Banks in
order to record, maintain and continue the first priority of the Deeds of Trust
and any and all financing statements, continuation statements and such other
documents as may from time to time be requested by Agent or the Banks in order
to create, perfect and maintain the security interest created by the Deeds of
Trust. Upon demand, Borrower shall pay to Agent or to any other party
designated by Agent the fees for recording the Deeds of Trust and the cost of
the mortgagee's title insurance policies on the real property and improvements
covered thereby, and all filing fees incurred by Agent in the perfection of the
mortgage liens and security interests contemplated hereby. Banks shall have no
obligation to make any Loan hereunder unless and until Borrower has fully
satisfied these requirements.
8.2 Security Agreement. In order to further secure the
payment when due of Borrower's Obligations, Borrower has granted to Agent for
the benefit of each of the Banks a first priority security interest in, among
other things, all of the accounts receivable, inventory, equipment, general
intangibles and other personal property of Borrower. Said security interest is
more fully described in and evidenced by that certain Security Agreement dated
as of October 5, 1995 and executed by Borrower in favor of Agent for the
benefit of each of the Banks as amended by an Amendment to Security Agreement
executed by and between Borrower and Agent (as so amended and as the same may
from time to time be further amended, modified, extended or renewed, the
"Security Agreement"). Borrower covenants and agrees that it will execute any
and all financing statements, continuation statements and such other documents
as may from time to time be requested by Agent or the Banks in order to create,
perfect and maintain the security interest created by the Security Agreement.
Upon demand, Borrower shall pay to Agent or to any other party designated by
Agent all filing fees incurred by Agent in the perfection of the security
interest contemplated hereby. Banks shall have no obligation to make any Loan
hereunder unless and until Borrower has fully satisfied these requirements.
8.3 Pledge Agreement. In order to further secure the
payment when due of Borrower's Obligations, Borrower has caused DPC Acquisition
Corp. to pledge to Agent for the benefit of each of the Banks all of the issued
and outstanding common stock of Borrower. Said pledge is more fully described
in and evidenced by that certain General Pledge and Security Agreement dated as
of October 5, 1995 and executed by DPC Acquisition Corp. in favor of Agent for
the benefit of each of the Banks as amended by an Amendment to Pledge Agreement
executed by and between DPC Acquisition Corp. and Agent (as so amended and as
the same may from time to time be further amended, modified, extended or
renewed, the "Pledge Agreement"). Borrower covenants and agrees that it will
cause DPC Acquisition Corp. to execute any and all collateral schedules, stock
powers, Reg. U-1 affidavits and such other
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53
documents as may from time to time be requested by Agent or the Banks in order
to create, perfect and maintain the pledge created by the Pledge Agreement.
Upon demand, Borrower shall pay to Agent or to any other party designated by
Agent all filing fees or transfer fees incurred by Agent in the perfection and
administration of the pledge contemplated hereby. Banks shall have no
obligation to make any Loan hereunder unless and until Borrower and DPC
Acquisition Corp. have fully satisfied these requirements.
8.4 Collateral Assignment. In order to further secure
the payment when due of Borrower's Obligations, Borrower has granted to Agent
for the benefit of each of the Banks a first priority Collateral Assignment in,
among other things, all of the registered U. S. patents and trademarks of
Borrower, including, but not limited to, those listed on Schedule 9.16 attached
hereto. Said Collateral Assignment is more fully described in and evidenced by
that certain Patent and Trademark Collateral Assignment and Security Agreement
dated as of October 5, 1995 and executed by Borrower in favor of Agent for the
benefit of each of the Banks as amended by an Amendment to Collateral
Assignment executed by and between Borrower and Agent (as so amended and as the
same may from time to time be further amended, modified, extended or renewed,
the "Collateral Assignment"). Borrower covenants and agrees that it will
execute any and all other documents as may from time to time be requested by
Agent or the Banks in order to create, perfect and maintain the Collateral
Assignment of all patents and trademarks created by the Collateral Assignment.
Upon demand, Borrower shall pay to Agent or to any other party designated by
Agent all filing fees incurred by Agent in the perfection of the Collateral
Assignment contemplated hereby. Bank shall have no obligation to make any Loan
hereunder unless and until Borrower has fully satisfied these requirements.
SECTION 9. REPRESENTATIONS AND WARRANTIES.
Borrower hereby represents and warrants to each of the Banks
that:
9.1 Corporate Existence and Power. Borrower and each
Subsidiary and Unrestricted Subsidiary: (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization;
(b) has all requisite powers and all governmental and regulatory licenses,
authorizations, consents and approvals required to carry on its business as now
conducted; and (c) is qualified to transact business as a foreign entity in,
and is in good standing under the laws of, all states in which it is required
by applicable law to maintain such qualification and good standing except for
those states in which the failure to qualify or maintain good standing could
not reasonably be expected to have a Material Adverse Effect.
9.2 Corporate Authorization. The execution, delivery and
performance by Borrower of this Agreement, the Revolving Credit Notes, the Term
Notes, the Letter of Credit Application(s), the Deeds of Trust, the Security
Agreement, the Collateral Assignment and the other Transaction Documents are
within the corporate powers of Borrower and have been duly authorized by all
necessary corporate action.
9.3 Binding Effect. This Agreement, the Revolving Credit
Notes, the Term Notes, the Letter of Credit Application(s), the Deeds of Trust,
the Security Agreement, the Collateral Assignment and the other Transaction
Documents executed contemporaneously with
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54
the execution of this Agreement have been duly executed and delivered by
Borrower and constitute the legal, valid and binding obligations of Borrower
enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and the Letter of Credit Application(s) and any future
Transaction Documents not executed contemporaneously with the execution of this
Agreement, when executed and delivered in accordance with this Agreement, will
constitute the legal, valid and binding obligations of Borrower enforceable in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency or other similar laws affecting creditors'
rights generally and by general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
9.4 Financial Statements. Borrower has furnished each of
the Banks with the following financial statements, identified by the chief
financial officer of Borrower: (1) the balance sheets and statements of
income, retained earnings and cash flows of the Acquired Company and its
Subsidiaries as of December 31, 1994, all certified by the Acquired Company's
independent certified public accountants, which financial statements have been
prepared in accordance with GAAP consistently applied; and (2) unaudited
consolidated balance sheets and statements of income, retained earnings and
cash flows of the Acquired Company and its Subsidiaries as of November 30,
1995, certified by the Vice President, Finance of the Acquired Company as being
true and correct to the best of his knowledge and as being prepared in
accordance with standard accounting practices of the Borrower and its
Subsidiaries consistently applied. Borrower further represents and warrants to
each of the Banks that: (1) said balance sheets and their accompanying notes
fairly present the condition, respectively, of the Acquired Company and its
Subsidiaries, and Borrower as of the dates thereof; (2) there has been no
material adverse change in the condition or operation, financial or otherwise,
of the Acquired Company or any of its Subsidiaries since November 30, 1995; and
(3) neither the Acquired Company, Borrower nor any Subsidiaries had, as of the
respective dates of such financial statements, any direct or contingent
liabilities which are not disclosed on said financial statements or the notes
thereto (to the extent such disclosure is required by GAAP).
9.5 Litigation. Except as disclosed on Schedule 9.5
attached hereto, there is no action or proceeding pending or, to the knowledge
of Borrower, threatened against Borrower or any Subsidiary before any court,
arbitrator or any governmental, regulatory or administrative body, agency or
official which, if adversely determined against Borrower or any Subsidiary,
could reasonably be expected to have a Material Adverse Effect, and neither
Borrower nor any Subsidiary is in default with respect to any order, writ,
injunction, decision or decree of any court, arbitrator or any governmental,
regulatory or administrative body, agency or official, a default under which
could reasonably be expected to have a Material Adverse Effect. As of the date
hereof, there are no outstanding judgments against Borrower or any Subsidiary.
9.6 Pension and Welfare Plans. Each Pension Plan and
Welfare Plan complies in all material respects with ERISA and all other
applicable statutes and governmental and regulatory rules and regulations; no
Reportable Event has occurred and is continuing with respect to any Pension
Plan; neither Borrower nor any Subsidiary or ERISA Affiliate has
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55
withdrawn from any Multi-Employer Plan in a "complete withdrawal" or a "partial
withdrawal" as defined in Sections 4203 or 4205 of ERISA, respectively; neither
Borrower nor any Subsidiary or ERISA Affiliate has entered into an agreement
pursuant to Section 4204 of ERISA; except as disclosed on Schedule 9.6 attached
hereto, neither Borrower nor any Subsidiary or ERISA Affiliate has in the past
contributed to or currently contributes to a Multi-Employer Plan; neither
Borrower nor any Subsidiary or ERISA Affiliate has any current withdrawal
liability with respect to a Multi-Employer Plan; no steps have been instituted
by Borrower or any Subsidiary or ERISA Affiliate to terminate any Pension Plan;
no condition exists or event or transaction has occurred in connection with any
Pension Plan, Multi-Employer Plan or Welfare Plan which could result in the
incurrence by Borrower or any Subsidiary or ERISA Affiliate of any material
liability, fine or penalty; and neither Borrower nor any Subsidiary or ERISA
Affiliate is a "contributing sponsor" as defined in Section 4001(a)(13) of
ERISA of a "single-employer plan" as defined in Section 4001(a)(15) of ERISA
which has two or more contributing sponsors at least two of whom are not under
common control. Except as disclosed on Schedule 9.6 attached hereto, neither
Borrower nor any Subsidiary or ERISA Affiliate has any liability with respect
to any Welfare Plan.
9.7 Tax Returns and Payment. Borrower and its
Subsidiaries and Unrestricted Subsidiaries have filed all Federal, state, local
and other tax returns which are required to be filed and have paid all taxes
which have become due pursuant to such returns and all other taxes and similar
assessments, fees and other governmental charges upon Borrower and its
Subsidiaries and Unrestricted Subsidiaries and upon their respective
Properties, income and franchises which have become due and payable by Borrower
or any of its Subsidiaries or Unrestricted Subsidiaries, except those (i)
wherein the amount, applicability or validity are being contested by Borrower
or any such Subsidiary or Unrestricted Subsidiary by appropriate proceedings
being diligently conducted in good faith and in respect of which adequate
reserves in accordance with GAAP have been established or (ii) the nonpayment
of which (a) by the Borrower or any Subsidiary or Unrestricted Subsidiary was
not willful and (b) could not reasonably be expected to have a Material Adverse
Effect. All material tax liabilities of Borrower and its Subsidiaries and
Unrestricted Subsidiaries were adequately provided for as of the date of this
Agreement, and are now so provided for on the books of Borrower and its
Subsidiaries and Unrestricted Subsidiaries. There is no proposed, asserted or
assessed tax deficiency against Borrower or any of its Subsidiaries and
Unrestricted Subsidiaries which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect.
9.8 Subsidiaries. Borrower has no Subsidiaries other
than as identified on Schedule 9.8 attached hereto, as the same may from time
to time be amended, modified or supplemented as provided herein. Schedule 9.8
attached hereto correctly sets forth, for each Subsidiary, the number of shares
of each class of common and preferred stock authorized for such Subsidiary, the
number of outstanding and the percentage of the outstanding shares of each such
class owned, directly or indirectly, by Borrower or one or more of its
Subsidiaries. The capital stock of each Subsidiary is duly authorized, validly
issued and fully paid and nonassessable. Except as disclosed on Schedule 9.8
attached hereto and except as disclosed in writing by Borrower to Agent of the
creation or Investment in any Unrestricted Subsidiary in accordance with the
definition thereof, neither Borrower nor any of its Subsidiaries, individually
or collectively, owns or holds, directly or indirectly, any capital stock or
equity security of, or
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any equity interest in, any corporation or business other than Borrower's
Subsidiaries. Borrower may at any time amend, modify or supplement Schedule
9.8 by notifying the Agent in writing of any changes thereto, including any
formation, acquisition, merger or liquidation of Subsidiaries or any change in
the capitalization of any Subsidiary, in each case, in accordance with the
terms of this Agreement and provided that any such new Subsidiary shall execute
and deliver to Agent for the benefit of all the Banks a Guaranty in form and
substance acceptable to Agent and the Banks pursuant to which such Subsidiary
shall Guarantee all of Borrower's Obligations, and upon such notice to Agent of
any such revision to Schedule 9.8, the representations and warranties contained
in this Section 9.8 shall be amended accordingly so long as such amendment,
modification or supplement is made within thirty (30) days after the occurrence
of any such changes in the facts stated therein and that such changes reflect
transactions that are permitted under this Agreement.
9.9 Compliance With Other Instruments; None Burdensome.
Neither Borrower nor any Subsidiary is a party to any contract or agreement or
subject to any charter or other corporate or other restriction which could have
a Material Adverse Effect and which is not disclosed on Borrower's financial
statements heretofore submitted to the Banks; none of the execution and
delivery by Borrower of the Transaction Documents, the consummation of the
transactions therein contemplated, or of any agreements pertaining to DPC
Acquisition Corp.'s and the Borrower's acquisition and cancellation of all of
the issued and outstanding capital stock of the Selling Shareholders in the
Acquired Company and DPC Acquisition Corp.'s merger of the Acquired Company
into Borrower or the compliance with the provisions thereof, has violated or
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on Borrower, or any of the provisions of Borrower's
Certificate of Incorporation or Bylaws or any of the provisions of any
indenture, agreement, document, instrument or undertaking to which Borrower is
a party or subject, or by which it or its Property is bound, or conflict with
or constitute a default thereunder or result in the creation or imposition of
any Lien pursuant to the terms of any such indenture, agreement, document,
instrument or undertaking (other than in favor of the Agent and/or the Banks
pursuant to the Transaction Documents). No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any governmental, regulatory, administrative or public body or
authority, or any subdivision thereof, or any other Person is required to
authorize, or is required in connection with, the execution, delivery or
performance of, or the legality, validity, binding effect or enforceability of,
any of the Transaction Documents that has not already been obtained.
9.10 Other Debt, Guarantees, Capitalized Leases and
Operating Leases. Except as disclosed on Schedule 9.10 attached hereto as of
the date of this Agreement, and except for Debt, Guarantees, Capitalized Leases
and Operating Leases incurred or made on or after the date hereof as permitted
under Section 10.2(a) and the other provisions of this Agreement, neither
Borrower nor any Subsidiary of Borrower is a borrower, guarantor or obligor
with respect to, or a lessee under, any Debt, Guarantees, Capitalized Leases or
Operating Leases.
9.11 Labor Matters. Neither Borrower nor any Subsidiary
or Unrestricted Subsidiary is a party to any labor dispute which could
reasonably be expected to have a Material Adverse Effect. There are no strikes
or walkouts relating to any labor contract to which
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57
Borrower or any Subsidiary or Unrestricted Subsidiary is subject. Hours worked
and payments made to the employees of Borrower and its Subsidiaries and
Unrestricted Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable law dealing with such matters. Except as
described on Schedule 9.11 attached hereto, all payments due from Borrower or
any Subsidiary or Unrestricted Subsidiary, or for which any claim may be made
against any of them, in respect of wages, employee health and welfare insurance
and/or other benefits have been paid or accrued as a liability on their
respective books.
9.12 Title to Property. Borrower and each Subsidiary is
the sole and absolute owner of, or has the legal right to use and occupy, all
Property it claims to own or which is necessary for Borrower or such Subsidiary
to conduct its business, free and clear of all Liens other than the Permitted
Liens. Borrower and its Subsidiaries enjoy peaceful and undisturbed possession
in all material respects under all leases under which they are operating as
lessees.
9.13 Regulation U. Borrower is not engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of The Board of Governors of the Federal Reserve System, as
amended) and no part of the proceeds of any Loan will be used, whether directly
or indirectly, and whether immediately, incidentally or ultimately (i) to
purchase or carry margin stock or to extend credit to others for the purpose of
purchasing or carrying margin stock, or to refund or repay indebtedness
originally incurred for such purpose or (ii) for any purpose which entails a
violation of, or which is inconsistent with, the provisions of any of the
Regulations of The Board of Governors of the Federal Reserve System, including,
without limitation, Regulations G, U, T or X thereof, as amended. If requested
by any of the Banks, Borrower shall furnish to the Agent a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to in
Regulation U.
9.14 Multi-Employer Pension Plan Amendments Act of 1980.
Borrower and each Subsidiary and Unrestricted Subsidiary is in compliance with
the Multi-Employer Pension Plan Amendments Act of 1980, as amended ("MEPPAA"),
and has no current withdrawal liability pursuant to MEPPAA.
9.15 Investment Company Act of 1940; Public Utility
Holding Company Act of 1935. Borrower is not an "investment company" as that
term is defined in, and is not otherwise subject to regulation under, the
Investment Company Act of 1940, as amended. Borrower is not a "holding
company" as that term is defined in, and is not otherwise subject to regulation
under, the Public Utility Holding Company Act of 1935, as amended.
9.16 Patents, Licenses, Trademarks, Etc. Except as
disclosed on Schedule 9.16 attached hereto, neither Borrower nor any Subsidiary
has any patents, trademarks, trademark rights or copyrights which are material
to the business of Borrower or any Subsidiary. Borrower and each Subsidiary
possesses all necessary patents, licenses, trademarks, trademark rights, trade
names, trade name rights and copyrights to conduct its business without
conflict with any patent, license, trademark, trade name or copyright of any
other Person.
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9.17 Environmental and Safety and Health Matters. Except
as disclosed on Schedule 9.17 attached hereto: (i) the operations of Borrower
and each Subsidiary and Unrestricted Subsidiary comply in all material respects
with (A) all applicable Environmental Laws and (B) all applicable Occupational
Safety and Health Laws; (ii) none of the operations of Borrower or any
Subsidiary or Unrestricted Subsidiary are subject to any Environmental Claim or
any judicial, governmental, regulatory or administrative proceeding alleging
the violation of any Occupational Safety and Health Law, which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect;
(iii) to the best of Borrower's knowledge, none of the operations of Borrower
or any Subsidiary or Unrestricted Subsidiary is the subject of any Federal or
state investigation evaluating whether any remedial action is needed to respond
to any unsafe or unhealthful condition at any premises of Borrower or such
Subsidiary or Unrestricted Subsidiary; (iv) neither Borrower nor any Subsidiary
or Unrestricted Subsidiary has filed any notice under any Environmental Law or
Occupational Safety and Health Law reporting (A) any past or present spillage,
disposal or Release into the environment of, or treatment, storage or disposal
of, any Hazardous Substance or any other hazardous, toxic or dangerous waste,
substance or constituent or other substance which could reasonably be expected
to have a Material Adverse Effect, or (B) any unsafe or unhealthful condition
at any premises of Borrower or such Subsidiary or Unrestricted Subsidiary which
could reasonably be expected to have a Material Adverse Effect; and (v) neither
Borrower nor any Subsidiary or Unrestricted Subsidiary has any material
contingent liability in connection with (A) any spillage, disposal or Release
into the environment of, or otherwise with respect to, any Hazardous Substances
or any other hazardous, toxic or dangerous waste, substance or constituent or
other substance or (B) any unsafe or unhealthful condition at any premises of
Borrower or such Subsidiary or Unrestricted Subsidiary.
9.18 Investments. Except as disclosed on Schedule 9.18
attached hereto or as permitted under Section 10.2 with the prior written
consent of the Required Banks, neither Borrower nor any Subsidiary has any
Restricted Investments.
9.19 No Default. No Default or Event of Default under
this Agreement has occurred and is continuing. There is no existing default or
event of default under or with respect to any indenture, contract, agreement,
lease or other instrument to which Borrower or any Subsidiary is a party or by
which Borrower, any Subsidiary or any Property of Borrower or any Subsidiary is
bound or affected, a default under which could reasonably be expected to have a
Material Adverse Effect. Borrower and each Subsidiary of Borrower has and is
in full compliance with and in good standing with respect to all governmental
permits, licenses, certificates, consents and franchises necessary to continue
to conduct its business as previously conducted by it and to own or lease and
operate its Properties as now owned or leased by it and none of said permits,
certificates, consents or franchises contain any term, provision, condition or
limitation more burdensome than such as are generally applicable to Persons
engaged in the same or similar business as Borrower or such Subsidiary, as the
case may be. Neither Borrower nor any Subsidiary of Borrower is in violation
of any applicable statute, law, rule, regulation or ordinance of the United
States of America, of any state, city, town, municipality, county or of any
other jurisdiction, or of any agency thereof, a violation of which could
reasonably be expected to have a Material Adverse Effect.
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9.20 Employment and Other Agreements. Except for the
employment agreements and the other agreements described in Schedule 9.20
attached hereto, true, complete and accurate copies of which have been
delivered to each of the Banks, there are no (a) employment agreements covering
the management of Borrower or any Subsidiary, (b) collective bargaining
agreements or other labor agreements covering any employees of Borrower or any
Subsidiary or (c) agreements for managerial, consulting or similar services to
which Borrower or any Subsidiary is a party or by which Borrower or any
Subsidiary is bound.
9.21 Government Contracts. Neither Borrower nor any
Subsidiary is a party to or bound by any supply agreements with the Federal
government or any state or local government or any agency thereof, the
termination or cancellation of which could reasonably be expected to have a
Material Adverse Effect.
9.22 Purchase and Other Commitments and Outstanding Bids.
No material purchase of Borrower or any Subsidiary is in excess of the normal,
ordinary and usual requirements of its business, or was made at any price in
excess of the then current market price as of the date when such purchase or
commitment to purchase was made, or contains terms and conditions more onerous
that those usual and customary in the applicable industry. There is no
outstanding bid, sales proposal, contract or unfilled order of Borrower or any
Subsidiary which (a) (i) will, or could if accepted, require Borrower or any
Subsidiary to supply goods or services at a cost to Borrower or any Subsidiary
in excess of the revenues to be received therefor or (ii) quotes prices which
do not include a markup over reasonably estimated costs consistent with past
markups on similar business based on market conditions current at that time,
and (b) would have a Material Adverse Effect.
9.23 Disclosure. Neither this Agreement nor any of the
Exhibits or Schedules hereto nor any certificate or other data furnished to the
Agent or any of the Banks in writing by or on behalf of Borrower either in
connection with the transactions contemplated by this Agreement or in
connection with DPC Acquisition Corp.'s and Borrower's acquisition and
cancellation of all of the outstanding capital stock of the Selling
Shareholders in the Acquired Company, contains any untrue or incorrect
statement of a material fact or omits to state a material fact necessary to
make the statements contained herein or therein not misleading. To the best
knowledge of Borrower, there is no fact peculiar to Borrower or any of its
Subsidiaries which presently has a Material Adverse Effect or in the future (so
far as Borrower can now reasonably foresee) could have a Material Adverse
Effect, which has not heretofore been disclosed in writing by Borrower to the
Agent.
SECTION 10. COVENANTS.
10.1 Affirmative Covenants of Borrower. Borrower
covenants and agrees that, so long as (i) any of the Banks has any obligation
to make any Loan hereunder or Mercantile has any obligation to issue any Letter
of Credit hereunder, (ii) any Letter of Credit remains outstanding or (iii) any
of Borrower's Obligations (excluding any continuing indemnity obligations
beyond the Term of this Agreement or any earlier termination hereof) remain
unpaid:
(a) Information. Borrower will deliver to each of the Banks:
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(i) as soon as available and in any event within
ninety (90) days after the end of each fiscal year of Borrower,
consolidated and consolidating balance sheets of Borrower and its
Subsidiaries and Unrestricted Subsidiaries as of the end of such
fiscal year and the related consolidated and consolidating statements
of income, stockholders equity and cash flows for such fiscal year,
setting forth in each case, in comparative form, the figures for the
previous fiscal year, all such financial statements to be prepared in
accordance with GAAP consistently applied and reported on by and
accompanied by the unqualified opinion of independent certified public
accountants of nationally recognized standing selected by Borrower and
reasonably acceptable to the Required Banks together with (1) a
certificate from such accountants to the effect that, in making the
examination necessary for the signing of such annual audit report,
such accountants have not become aware of any Default or Event of
Default that has occurred and is continuing, or, if such accountants
have become aware of any such event, describing it and the steps, if
any, being taken to cure it and (2) the computations of such
accountants evidencing Borrower's compliance with the financial
covenants contained in Sections 10.1(m)(i) through (iv) and 10.2(j) of
this Agreement as calculated on a consolidated basis for Borrower and
its Subsidiaries but excluding its Unrestricted Subsidiaries (such
accountants, however, shall not be liable to anyone by reason of their
failure to obtain knowledge of any Default or Event of Default which
would not be disclosed in the course of an audit conducted in
accordance with generally accepted auditing standards);
(ii) as soon as available and in any event within
forty-five (45) days after the end of each of the first three (3)
fiscal quarters of each fiscal year of Borrower, consolidated and
consolidating balance sheets of Borrower and its Subsidiaries and
Unrestricted Subsidiaries as of the end of such fiscal quarter and the
related consolidated and consolidating statements of income, retained
earnings and cash flows for such fiscal quarter and for the portion of
Borrower's fiscal year ended at the end of such fiscal quarter,
setting forth in each case in comparative form, the figures for the
corresponding fiscal quarter and the corresponding portion of
Borrower's previous fiscal year, all in reasonable detail and
satisfactory in form to the Required Banks and certified (subject to
normal year-end adjustments) as to fairness of presentation, GAAP
(other than footnotes) and consistency by the principal financial
officer of Borrower;
(iii) promptly upon transmission thereof, copies of
all such financial statements, proxy statements, notices and reports
as Borrower or any Subsidiary shall send to its stockholders and
copies of all registration statements (without exhibits) and all
reports which Borrower or any Subsidiary files with the Securities and
Exchange Commission (or any governmental body or agency succeeding to
the functions of the Securities and Exchange Commission);
(iv) simultaneously with the delivery of each set
of financial statements referred to in clauses (i) and (ii) above, a
certificate of the principal
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financial officer of Borrower in the form attached hereto as Exhibit I
and incorporated herein by reference, accompanied by supporting
financial work sheets where appropriate, (A) evidencing Borrower's
compliance with the financial covenants contained in Sections
10.1(m)(i) through (iv) and 10.2(j) of this Agreement as calculated on
a consolidated basis for Borrower and its Subsidiaries but excluding
its Unrestricted Subsidiaries, (B) stating whether there exists on the
date of such certificate any Default or Event of Default and, if any
Default or Event of Default then exists, setting forth the details
thereof and the action which Borrower is taking or proposes to take
with respect thereto and (C) certifying that all of the
representations and warranties of Borrower contained in this
Agreement, as the same shall have been from time to time updated by
Borrower in writing to Agent (provided such updating shall not relieve
Borrower from its obligation to comply with all covenants contained
herein), are true and correct in all material respects on and as of
the date of such certificate as if made on the date of such
certificate;
(v) promptly upon receipt thereof, any reports
submitted to Borrower or any Subsidiary (other than reports previously
delivered pursuant to Sections 10.1(a)(i) and (ii) above) by
independent accountants in connection with any annual, interim or
special audit made by them of the books of Borrower or any Subsidiary;
(vi) as soon as available and in any event within
ninety (90) days after the beginning of each fiscal year of Borrower,
consolidated balance sheet, income statement and cash flow projections
for Borrower and its Subsidiaries (not including its Unrestricted
Subsidiaries) for such fiscal year and the succeeding one (1) year
period, all in form and detail reasonably acceptable to the Required
Banks; and
(vii) with reasonable promptness, such further
information regarding the business, affairs and financial condition of
Borrower or any Subsidiary as Bank may from time to time reasonably
request.
Each of the Banks is hereby authorized to deliver a copy of
any financial statement or other information made available by Borrower to any
regulatory authority having jurisdiction over such Bank, pursuant to any
request therefor.
(b) Payment of Indebtedness. Borrower will, and
it will cause each of its Subsidiaries to, (i) pay and discharge any and all
Indebtedness payable or Guaranteed by Borrower or such Subsidiary, as the case
may be, and any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) in accordance
with the agreement, document or instrument relating to such Indebtedness or
Guarantee, provided, however, that neither Borrower nor any Subsidiary shall be
required to pay any such Indebtedness or Guarantee (excluding Borrower's
Obligations) which is being contested in good faith and by appropriate
proceedings being diligently conducted, except that Borrower or such Subsidiary
of Borrower, as the case may be, shall pay or cause to be paid any such
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Indebtedness or Guarantee forthwith upon the commencement of proceedings to
foreclose any Lien which is attached as security therefor, unless such
foreclosure is stayed by the filing of an appropriate bond in a manner
satisfactory to the Required Banks, and (ii) faithfully perform, observe and
discharge all covenants, conditions and obligations which are imposed upon
Borrower or such Subsidiary, as the case may be, by any and all agreements,
documents, instruments and indentures evidencing, securing or otherwise
relating to such Indebtedness or Guarantee.
(c) Maintenance of Books and Records;
Consultations and Inspections. Borrower will, and it will cause each of its
Subsidiaries to, maintain books and records in accordance with GAAP and in
which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities. Borrower will, and it
will cause each of its Subsidiaries to, permit the Agent and each of the Banks
(and any Person appointed by the Agent or any of the Banks to whom the Borrower
does not reasonably object) to discuss the affairs, finances and accounts of
Borrower and each Subsidiary with the officers of Borrower and each Subsidiary
and their independent public accountants, all at such reasonable times and as
often as the Agent or any of the Banks may from time to time reasonably
request. Borrower will also permit, and will cause each Subsidiary to permit,
inspection of its Properties, books and records by the Agent and each of the
Banks during normal business hours and at other reasonable times. Borrower
will reimburse the Agent and each of the Banks upon demand for all costs and
expenses incurred by the Agent or any of the Banks in connection with any such
inspection conducted by the Agent or any of the Banks while any Default or
Event of Default under this Agreement has occurred and is continuing. A
representative of Borrower may be present during any such inspection, provided
that a particular representative's availability or unavailability shall not
inhibit or delay such inspection. Borrower shall permit the Agent to
communicate directly with Borrower's independent public accountants and to
discuss the affairs, finances and accounts of the Borrower and the Subsidiaries
at such reasonable times and intervals and to such reasonable extent as the
Agent may request. A representative of Borrower may be present and/or
participate in any such communication with Borrower's accountants, provided
that a particular representative's availability or unavailability shall not
inhibit or delay such communication.
(d) Payment of Taxes. Borrower will, and it will
cause each of its Subsidiaries and Unrestricted Subsidiaries to, duly file all
Federal, state and local income tax returns and all other tax returns and
reports of Borrower or such Subsidiary or Unrestricted Subsidiary, as the case
may be, which are required to be filed and duly pay and discharge promptly all
taxes, assessments and other governmental charges imposed upon it or any of its
Property; provided, however, that neither Borrower nor any Subsidiary or
Unrestricted Subsidiary shall be required to pay any such tax, assessment or
other governmental charge the payment of which is being contested in good faith
and by appropriate proceedings being diligently conducted and for which
adequate reserves in accordance with GAAP have been provided, except that
Borrower or such Subsidiary or Unrestricted Subsidiary of Borrower, as the case
may be, shall pay or cause to be paid all such taxes, assessments and
governmental charges forthwith upon the commencement of proceedings to
foreclose any Lien which is attached as security therefor, unless such
foreclosure is stayed by the filing of an appropriate bond in a manner
satisfactory to the Required Banks.
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(e) Payment of Claims. Borrower will, and it
will cause each of its Subsidiaries to, promptly pay and discharge (i) all
trade accounts payable in accordance with usual and customary business
practices (but in no event later than thirty (30) days after the due date
thereof) and (ii) all claims for work, labor or materials which if unpaid might
become a Lien upon of its any Property or assets; provided, however, that
neither Borrower nor any Subsidiary shall be required to pay any such account
payable or claim the payment of which is being contested in good faith and by
appropriate proceedings being diligently conducted and for which adequate
reserves in accordance with GAAP have been provided, except that Borrower or
such Subsidiary, as the case may be, shall pay or cause to be paid all such
accounts payable and claims forthwith upon the commencement of proceedings to
foreclose any Lien which is attached as security therefor, unless such
foreclosure is stayed by the filing of an appropriate bond in a manner
satisfactory to the Required Banks.
(f) Corporate Existence. Borrower will, and it
will cause each of its Subsidiaries and Unrestricted Subsidiaries to, do all
things necessary to (i) preserve and keep in full force and effect at all times
its corporate or other existence and all permits, licenses, franchises and
other rights material to its business, except that Borrower may in its
discretion voluntarily liquidate any Unrestricted Subsidiary in accordance with
the laws of the jurisdiction of its incorporation provided that in connection
with or as a result of any such voluntary liquidation, Borrower shall not
assume or otherwise become obligated on, or be deemed to have assumed or be
obligated on, any Indebtedness of such Unrestricted Subsidiary, and (ii) be
duly qualified to do business in all jurisdictions where the nature of its
business or its ownership of Property requires such qualification.
(g) Maintenance of Property. Borrower will, and
it will cause each of its Subsidiaries to, at all times, preserve and maintain
all of the Property used or useful in the conduct of its business in good
condition, working order and repair, ordinary wear and tear excepted.
(h) Compliance with Laws, Regulations, Etc.
Borrower will, and it will cause each of its Subsidiaries and Unrestricted
Subsidiaries to, comply with any and all laws, ordinances and governmental and
regulatory rules and regulations to which Borrower or such Subsidiary or
Unrestricted Subsidiary, as the case may be, is subject (including, without
limitation, all Occupational Safety and Health Laws and all Environmental Laws)
except where noncompliance would not have a Material Adverse Effect, and obtain
any and all licenses, permits, franchises and other governmental and regulatory
authorizations necessary to the ownership of its Properties or to the conduct
of its business, which violation or failure to obtain could reasonably be
expected to have a Material Adverse Effect.
(i) Environmental Matters. Borrower will, and it
will cause each of its Subsidiaries and Unrestricted Subsidiaries to, at all
times comply with all requirements and agreements contained in Section 13.4
hereof. Borrower shall give the Agent and each of the Banks prompt written
notice of (i) any material Environmental Claim or any other action or
investigation with respect to the existence or potential existence of any
Hazardous Substances instituted or threatened with respect to Borrower or any
Subsidiary or Unrestricted Subsidiary or any of the Properties or facilities
owned, leased or operated by Borrower or any Subsidiary
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or Unrestricted Subsidiary and (ii) any condition or occurrence on any of the
Properties or facilities owned, leased or operated by Borrower or any
Subsidiary or Unrestricted Subsidiary which constitutes a material violation of
any Environmental Laws or which gives rise to a reporting obligation or
requires removal or remediation under any Environmental Laws. Such notice
shall in either case be accompanied by Borrower's plan with respect to removal
or remediation and Borrower agrees to take all action which is reasonably
necessary in connection with such action, investigation, condition or
occurrence in accordance with such plan with due diligence and to complete such
removal or remediation as promptly as possible and in all events within the
time required by any Environmental Laws or any other applicable law, rule or
regulation. Borrower shall promptly provide the Agent and each of the Banks
with copies of all documentation relating thereto, and such other information
with respect to environmental matters as the Agent or any of the Banks may
reasonably request from time to time.
(j) ERISA Compliance. If Borrower, any
Subsidiary or any ERISA Affiliate shall have any Pension Plan, Borrower, such
Subsidiary or such ERISA Affiliate, as the case may be, shall comply with all
requirements of ERISA relating to such Pension Plan. Without limiting the
generality of the foregoing, unless Borrower shall have receive the prior
written consent of the Required Banks to the contrary (which consent shall not
be unreasonably withheld), Borrower will not, and it will not cause or permit
any Subsidiary or any ERISA Affiliate to:
(i) permit any Pension Plan maintained by
Borrower, any Subsidiary or any ERISA Affiliate to engage in any
nonexempt "prohibited transaction," as such term is defined in Section
4975 of the Code;
(ii) permit any Pension Plan maintained by
Borrower, any Subsidiary or any ERISA Affiliate to incur any
"accumulated funding deficiency", as such term is defined in Section
302 of ERISA, 29 U.S.C. Section 1082, whether or not waived;
(iii) terminate any Pension Plan in a manner which
could result in the imposition of a Lien on any Property of Borrower,
any Subsidiary or any ERISA Affiliate pursuant to Section 4068 of
ERISA, 29 U.S.C. Section 1368; or
(iv) take any action which would constitute a
complete or partial withdrawal from a Multi-Employer Plan within the
meaning of Sections 4203 or 4205 of Title IV of ERISA.
(k) Notices. Borrower will notify the Agent and
each of the Banks in writing of any of the following within three (3) Domestic
Business Days after learning of the occurrence thereof, describing the same
and, if applicable, the steps being taken by the Person(s) affected with
respect thereto:
(i) the occurrence of any Default or Event of
Default under this Agreement;
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(ii) the occurrence of any default or event of
default by Borrower, any Subsidiary, any other Obligor or any
Unrestricted Subsidiary under any note, Senior Unsecured Note,
indenture, loan agreement, mortgage, deed of trust, security
agreement, lease or other similar agreement, document or instrument to
which Borrower, any Subsidiary, any other Obligor or any Unrestricted
Subsidiary, as the case may be, is a party or by which it is bound or
to which it is subject which evidences or secures Indebtedness in an
outstanding principal amount of $1,000,000.00 or more in the aggregate
for all such defaulted agreements;
(iii) the institution of any litigation,
arbitration proceeding or governmental or regulatory proceeding
affecting Borrower, any other Obligor or any Subsidiary, whether or
not considered to be covered by insurance, in which the prayer or
claim for relief seeks recovery of an amount in excess of
$1,000,000.00 (or, if no dollar amount is specified in the prayer or
claim for relief, in which there is a reasonable likelihood of
recovery of an amount in excess of $1,000,000.00) or any form of
equitable relief;
(iv) the entry of any judgment or decree against
Borrower, any other Obligor or any Subsidiary which, when aggregated
with any other such judgments or decrees then entered and unsatisfied,
exceed $1,000,000.00 in the aggregate;
(v) the occurrence of a Reportable Event with
respect to any Pension Plan; the filing of a notice of intent to
terminate a Pension Plan by Borrower, any ERISA Affiliate or any
Subsidiary; the institution of proceedings to terminate a Pension Plan
by the PBGC or any other Person; the withdrawal in a "complete
withdrawal" or a "partial withdrawal" as defined in Sections 4203 and
4205, respectively, of ERISA by Borrower, any ERISA Affiliate or any
Subsidiary from any Multi-Employer Plan; or the incurrence of any
material increase in the contingent liability of Borrower or any
Subsidiary with respect to any "employee welfare benefit plan" as
defined in Section 3(1) of ERISA which covers retired employees and
their beneficiaries;
(vi) the occurrence of any event that is
reasonably likely to have a Material Adverse Effect; and
(vii) any notices required to be provided pursuant
to other provisions of this Agreement and notice of the occurrence of
such other events as the Agent or any of the Banks may from time to
time reasonably specify.
(l) Insurance. Borrower will, and it will cause
each of its Subsidiaries to, insure all of its Property of the character
usually insured by corporations engaged in the same or similar businesses
similarly situated, against loss or damage of the kind customarily insured
against by such corporations, unless higher limits or coverage are reasonably
required in writing by the Required Banks, and carry adequate liability
insurance and other insurance of a kind and
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in an amount generally carried by corporations engaged in the same or similar
businesses similarly situated, unless higher limits or coverage are reasonably
required in writing by the Required Banks. All insurance required by this
Section 10.1(l) shall be with insurers rated A-XII or better by A.M Best
Company (or accorded a similar rating by another nationally or internationally
recognized insurance rating agency of similar standing if A.M. Best Company is
not then in the business of rating insurers or rating foreign insurers) or such
other insurers as may from time to time be reasonably acceptable to the
Required Banks. All such insurance may be subject to reasonable deductible
amounts. Simultaneously with each delivery of the annual audited financial
statements under Section 10.1(a)(i), Borrower shall deliver to the Agent and
each of the Banks a certificate of an officer of Borrower specifying the
details of all insurance then in effect and evidence of the payment of all
premiums therefor.
(m) Financial Covenants.
(i) Minimum Consolidated EBITDA. Borrower will
have and maintain a Consolidated EBITDA, determined for the
four-quarter period ending on the date of each such calculation
hereunder, of at least:
For Fiscal Quarters Ended Minimum Consolidated EBITDA
------------------------------------- ---------------------------
From To
---- --
October 5, 1995 September 30, 1996 $41,000,000.00
October 1, 1996 September 30, 1997 43,050,000.00
October 1, 1997 September 30, 1998 45,200,000.00
October 1, 1998 September 30, 1999 47,000,000.00
October 1, 1999 September 30, 2000 48,500,000.00
(ii) Minimum Consolidated Cash Flow Coverage
Ratio. Borrower will have and maintain a Consolidated Cash Flow
Coverage Ratio of at least (i) 0.85 to 1.0 at all times up to and
including September 30, 1997, (ii) 0.90 to 1.0 at all times during the
period commencing October 1, 1997 and ending September 30, 1998, (iii)
1.05 to 1.0 at all time during the period commencing October 1, 1998
and ending September 30, 1999, and (iv) 1.10 to 1.0 at all times from
and after October 1, 1999.
(iii) Maximum Consolidated Total Debt to
Consolidated EBITDA. Borrower will at all times have and maintain a
ratio of Consolidated Total Debt to Consolidated EBITDA which is less
than or equal to the following:
For the Period
-------------- Maximum Consolidated Total
From To Debt to Consolidated EBITDA
---- -- ---------------------------
October 5, 1995 September 30, 1996 5.25 to 1.00
October 1, 1996 September 30, 1997 5.00 to 1.00
October 1, 1997 September 30, 1998 4.65 to 1.00
October 1, 1998 September 30, 1999 4.25 to 1.00
October 1, 1999 September 30, 2000 3.90 to 1.00
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(iv) Maximum Consolidated Senior Secured Debt to
Consolidated EBITDA. Borrower will at all times have and maintain a
ratio of Consolidated Senior Secured Debt to Consolidated EBITDA which
is less than or equal to the following:
For the Period
-------------- Maximum Consolidated Funded
From To Debt to Consolidated EBITDA
---- -- ---------------------------
October 5, 1995 September 30, 1996 2.30 to 1.00
October 1, 1996 September 30, 1997 2.00 to 1.00
October 1, 1997 September 30, 1998 1.75 to 1.00
October 1, 1998 September 30, 1999 1.50 to 1.00
October 1, 1999 September 30, 2000 1.00 to 1.00
(n) Further Assurances. Borrower will execute
and deliver to the Agent, at any time and from time to time, any and all
further agreements, documents and instruments, and take any and all further
actions which may be required under applicable law, or which the Agent or any
of the Banks may from time to time reasonably request, in order to effectuate
the transactions contemplated by this Agreement, the Security Agreement, the
Deeds of Trust, the Collateral Assignment, the Pledge Agreement and the other
Transaction Documents.
(o) Accountant. Borrower shall give each of the
Banks prompt notice of any change of Borrower's independent certified public
accountants and a statement of the reasons for such change. Borrower shall at
all times utilize independent certified public accountants of nationally
recognized standing reasonably acceptable to the Required Banks.
(p) Prepayment of Bonds. On October 1, 1996,
Borrower agrees to prepay all of the outstanding principal, accrued interest,
premium and other amounts then due and payable on those certain Industrial
Revenue Bonds (The Xxxxx Products Company Project) Series 1991, issued by the
County of Pueblo, Colorado. Provided no Default or Event of Default then
exists hereunder and the conditions in Section 7 have been satisfied, the Banks
agree to advance $3,725,760.69 of the remaining principal balance of the Term
Loan to Borrower on October 1, 1996 for purposes of making such prepayment,
provided that Borrower shall cause the bond trustee to release the Bond Letter
of Credit with respect thereto and to deliver to Agent for the benefit of the
Banks a Full Deed of Release with respect to the First Deed of Trust securing
Borrower's Pueblo, Colorado real property, and such other UCC-3 releases and
other lien releases as Agent may reasonably require, and provided further that
Borrower shall also execute and deliver to Agent for the benefit of each of the
Banks a Deed of Trust on Borrower's Pueblo, Colorado real property, together
with such UCC-1 financing statement fixture filings, assignments of leases and
other documents as Agent shall reasonably require to evidence Agent's first
perfected lien in such property and improvements, and Borrower shall supply to
Agent for the benefit of Banks a title insurance policy for the Agent's Deed of
Trust on Borrower's Pueblo, Colorado real property in form and with coverages
similar to those in Agent's existing title policies on Borrower's other
properties.
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(q) Subsidiaries. Borrower covenants and agrees
that in the event Borrower shall create or acquire any new Subsidiary or
Subsidiaries at any time after the date hereof, that Borrower shall cause each
such Subsidiary to (i) guaranty all of Borrower's Obligations to Agent and the
Banks pursuant to an unlimited continuing guaranty in form and substance
acceptable to Agent and the Required Banks, and (ii) secure such guaranty with
security interests and liens in favor of the Agent for the benefit of all of
the Banks in all personal property of such Subsidiary pursuant to a security
agreement similar in form to that of the Security Agreement executed by
Borrower. Borrower further covenants and agrees to cause each such Subsidiary
to execute and deliver such resolutions, UCC-1 financing statements and other
similar documents for purposes of granting and perfecting such security
interests and liens as Agent shall reasonably require.
10.2 Negative Covenants of Borrower. Borrower covenants
and agrees that, so long as (i) any of the Banks has any obligation to make any
Loan hereunder or Mercantile has any obligation to issue any Letter of Credit
hereunder, (ii) any Letter of Credit remains outstanding or (iii) any of
Borrower's Obligations remain unpaid, unless the prior written consent of the
Required Banks is obtained:
(a) Limitation on Indebtedness. Borrower will
not, and it will not cause or permit any of its Subsidiaries to, incur or be
obligated on any Indebtedness, either directly or indirectly, by way of
Guarantee, suretyship or otherwise, other than:
(i) the Borrower's Obligations to the Agent and
the Banks;
(ii) the Swing Loans from Mercantile;
(iii) Indebtedness existing as of the date hereof
and listed on Schedule 9.10 attached hereto and Indebtedness relating
to the employee benefit plans listed on Schedule 9.6;
(iv) the Indebtedness evidenced by the Senior
Unsecured Notes in an aggregate principal amount of up to
$160,000,000.00;
(v) Indebtedness described in clause (b) of the
defined term Restricted Investment of this Agreement;
(vi) Indebtedness in respect of taxes,
assessments, governmental charges or levies and claims for labor,
materials and supplies to the extent that payment therefor shall not
at the time be required to be made in accordance with the provisions
of Section 10.1(d) or Section 10.1(e);
(vii) Indebtedness in respect of judgments or
awards that have been in force for less than the applicable period for
taking an appeal so long as execution is not levied thereunder or in
respect of which Borrower or any Subsidiary shall at the time in good
faith be prosecuting an appeal or proceedings for review and in
respect of which a stay of execution shall have been obtained
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pending such appeal or review and an appeal bond or other bond in the
full amount of such judgment or award shall have been obtained by
Borrower of such Subsidiary with respect thereto;
(viii) current liabilities of Borrower or any
Subsidiary of Borrower incurred in the ordinary course of business not
incurred through (A) the borrowing of money, or (B) the obtaining of
credit except for credit on an open account basis customarily extended
and in fact extended in connection with normal purchases of goods and
services;
(ix) endorsements for collection, deposits or
negotiation and warranties of products or services, in each case
incurred in the ordinary course of business;
(x) Indebtedness in respect of performance,
surety or appeal bonds obtained in the ordinary course of Borrower's
business and in connection with transactions in the ordinary course of
Borrower's business;
(xi) Indebtedness under commodity price swaps,
commodity price caps and commodity price collar and floor agreements,
and similar agreements or arrangements designed to protect against or
manage fluctuations in commodity prices with respect to agricultural
commodities bought and consumed in the ordinary course of business of
Borrower and its Subsidiaries in amounts and on terms consistent with
industry standard practices for hedging such future commodities
requirements of Borrower and its Subsidiaries;
(xii) Indebtedness referred to in Section 10.2
(i)(v), and noncash distributions of interest thereon in the form of
additional debentures;
(xiii) Indebtedness for declared and unpaid
Distributions on Borrower's stock to the extent permitted under
Section 10.2(i); and
(xiv) Indebtedness not otherwise permitted by this
Section 10.2(a) in an amount not to exceed $10,000,000.00 in the
aggregate at any one time outstanding for Borrower and all
Subsidiaries of Borrower, provided that if any portion of such
Indebtedness is borrowed from an Unrestricted Subsidiary, it shall be
subordinated in writing to the payment of Borrower's Obligations in
form and substance satisfactory to the Required Banks.
(b) Limitation on Liens. Borrower will not, and
will not cause or permit any of its Subsidiaries to, create, incur or assume,
or suffer to be incurred or to exist, any Lien on any of its or their Property
or assets, whether now owned or hereafter acquired, or upon any income or
profits therefrom, except for Permitted Liens.
(c) Consolidation, Merger, Sale of Assets,
Dissolution, Etc. Borrower will not, and will not cause or permit any of its
Subsidiaries to, (i) directly or indirectly, merge
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into or with or consolidate with any other Person or permit any other Person to
merge into or with or consolidate with it, or (ii) sell, assign, lease,
transfer, abandon or otherwise dispose of any of its Property (including,
without limitation, any shares of capital stock of a Subsidiary owned by
Borrower or another Subsidiary), except for (A) sales of Inventory in the
ordinary course of business, (B) sales of Restricted Investments in the
ordinary course of business, (C) sales of fixed assets in an aggregate amount
not to exceed ten percent (10%) of the book value of Borrower's total assets as
of October 6, 1995, so long as such asset sales shall be sold to third party
buyers in arms-length transactions on reasonable terms and so long as the net
proceeds thereof are used solely to purchase replacement fixed assets or assets
of comparable quality or to pay or prepay the Borrower's Obligations, or (D)
other sales of fixed assets not to exceed $100,000.00 in the aggregate in any
fiscal year. Agent and Banks agree that so long as no Default or Event of
Default then exists hereunder and so long as the sale of any fixed asset is
made by Borrower or a Subsidiary in accordance with the provisions of this
Section 10.2(c), upon request of Borrower, Agent shall release the security
interest in favor of Agent for the benefit of Banks in any such asset.
(d) Sale and Leaseback Transactions. Borrower
will not, and it will not cause or permit any of its Subsidiaries to, enter
into any arrangement, directly or indirectly, whereby Borrower or such
Subsidiary of Borrower shall in one or more related transactions sell, transfer
or otherwise dispose of any Property owned by Borrower or such Subsidiary of
Borrower and then rent or lease, as lessee, such Property or any part thereof
for a period or periods which in the aggregate would exceed twelve (12) months
from the date of commencement of the lease term.
(e) Sale or Discount of Accounts. Borrower will
not, and it will not cause or permit any of its Subsidiaries to, sell or
discount any of its notes or accounts receivable or chattel paper.
(f) Transactions with Affiliates. Except for (i)
transactions specifically authorized by the Investors' Agreement dated October
5, 1995 among DPC Acquisition Corp. and its shareholders, Borrower and certain
other parties (the "Investors' Agreement"), the Subscription Agreement (as
defined in the Investors' Agreement), the certificate of incorporation of
Borrower and the Indenture dated March 4, 1996 pursuant to which the Senior
Unsecured Notes have been issued (it being understood that the exception in
this clause (i) shall not be construed to authorize actions otherwise
prohibited by sections of this Agreement other than this Section 10.2(f)), (ii)
payment of fees and expenses to Summit Capital, Inc., Chase Manhattan
Investment Holdings, Inc. or its affiliate, and affiliates of DLJMB in
connection with the transactions contemplated hereby, and (iii) normal course
underwriting, investment banking or financial advisory transactions at rates
not in excess of those customary in the industry and which are not prohibited
under Section 10.2(j), Borrower will not, and it will not cause or permit any
of its Subsidiaries to, enter into or be a party to any transaction or
arrangement with any Affiliate (including, without limitation, the purchase
from, sale to or exchange of Property with, or the rendering of any service by
or for, any Affiliate), except in the ordinary course of business and pursuant
to the reasonable requirements of Borrower's or such Subsidiary's business and
upon fair and reasonable terms no less favorable to Borrower or such Subsidiary
than would be obtained in a comparable arm's length transaction with a Person
not an Affiliate.
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(g) Changes in Nature of Business. Borrower will
not, and it will not cause or permit any of its Subsidiaries or Unrestricted
Subsidiaries to, engage in any business if, as a result, the general nature of
the business which would then be engaged in by Borrower and its Subsidiaries
and Unrestricted Subsidiaries, considered as a whole, would be substantially
changed from the general nature of the business engaged in by Borrower and its
Subsidiaries and Unrestricted Subsidiaries as of the date of this Agreement,
which is primarily the business of the manufacture and distribution of pet food
or animal feed.
(h) Fiscal Year. Borrower will not, and it will
not cause or permit any of its Subsidiaries to, change its fiscal year.
(i) Stock Redemptions and Distributions.
Borrower will not, and it will not cause or permit any of its Subsidiaries to,
declare or incur any liability to make any Distribution in respect of the
capital stock of Borrower, provided, however, that any Subsidiary may declare
and pay any Distribution to Borrower, and provided further that Borrower may:
(i) cause non-cash accretion to the liquidation value of the 14.25% Senior
Exchangeable Preferred Stock Due 2007 in accordance with the terms thereof and
may distribute its noncash payment-in-kind Distributions for accreted or
accrued dividends on its 14.25% Senior Exchangeable Preferred Stock Due 2007 in
accordance with the terms thereof to DLJMB, Chase Manhattan Investment
Holdings, Inc., Summit/DPC Partners, L.P. and certain other investors, (ii) for
periods after October 5, 2000 and provided no Default or Event of Default then
exists hereunder, pay cash dividends on such 14.25% Senior Exchangeable
Preferred Stock Due 2007 in accordance with the terms thereof, (iii) repurchase
or redeem its outstanding 14.25% Senior Exchangeable Preferred Stock Due 2007
with a portion of the net proceeds of any equity offering as permitted under
Section 5.4 herein or any equity offering by DPC Acquisition Corp., the
proceeds of which are contributed to Borrower (provided such proceeds are
applied to Borrower's Obligations and such 14.25% Senior Exchangeable Preferred
Stock Due 2007 as set forth in Section 5.4 and in accordance with the
provisions of such 14.25% Senior Exchangeable Preferred Stock Due 2007), (iv)
redeem its outstanding 14.25% Senior Exchangeable Preferred Stock Due 2007 in
exchange for preferred stock having similar terms, (v) distribute its 14.25%
Subordinated Exchange Debentures due 2007 (having terms similar to those of the
14.25% Senior Exchangeable Preferred Stock Due 2007) in exchange for such
14.25% Senior Exchangeable Preferred Stock Due 2007, provided that all payments
of principal, interest and other amounts due under such 14.25% Subordinated
Exchange Debentures due 2007 are subordinated to Borrower's Obligations in a
manner acceptable to Agent and the Banks, with no payments being made
thereunder until the repayment in full of all of Borrower's Obligations and the
termination of all commitments to lend hereunder, and (vi) pay dividends to DPC
Acquisition Corp. annually for audit expenses, taxes payable currently and such
other ordinary expenses consented to by Agent, which consent shall not be
unreasonably withheld.
(j) Non-Management Compensation. Except for the
closing fees permitted in Section 10.2(f) above, Borrower will not permit the
total aggregate compensation (including salaries, consulting fees, management
fees, non-transaction related financial advisory fees, bonuses and other
amounts, but excluding fees for transaction related underwriting and investment
banking services at rates not in excess of those customary in the industry)
paid by the Borrower to Summit Capital, Inc., Summit/DPC Partners, L.P., Chase
Manhattan
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72
Investment Holdings, Inc., DPC Acquisition Corp., DLJMB or any other equity
investor (other than a full time employee of Borrower) or any other principal
or employee of any equity investor, or any of their respective family members
or to any related or affiliated Person of Summit Capital, Inc., Summit/DPC
Partners, L.P., Chase Manhattan Investment Holdings, Inc., DPC Acquisition
Corp., DLJMB or any other equity investor (other than a full time employee of
Borrower) or any other principal or employee of any equity investor, or any of
their respective family members in any fiscal year to exceed the amount of
$600,000.00 in the aggregate during any fiscal year of Borrower.
(k) Ownership Dilution. Borrower will not cause
or permit the ownership and voting control of DPC Acquisition Corp.'s voting
stock by Borrower's management, including Summit/DPC Partners, L.P. and other
members of the Summit investor group, Xxx X. Xxxxxxxx, Xxxxx Xxxxxxx, Xxxx X.
Xxxxxxxx, Xxxx X. Xxxxx and R. Xxxx Xxxx, at any time during the Term hereof,
to be less than twenty-five percent (25%) of the total of all of DPC
Acquisition Corp.'s voting stock then outstanding and then deemed to be
outstanding as determined hereunder, except that in the event any such
individual is removed from management for cause, such individual's ownership
interest shall not thereafter be included for purposes of determining
management's ownership of such voting stock and such individual's then current
percentage share of ownership of DPC Acquisition Corp.'s voting stock shall be
subtracted from such twenty- five percent (25%) limitation, and except that in
the event of any public offering of voting stock of DPC Acquisition Corp., such
twenty-five percent (25%) limitation will be reduced to reflect the dilution
occurring as a result of such offering so long as it shall not then be reduced
below fifteen percent (15%). For purposes of this Section 10.2(k), all stock,
PIK stock, bonds, options, rights, warrants and other securities which by their
terms on the date of any such determination may, directly or indirectly, be
converted into, exercised for, or otherwise exchanged for common stock of DPC
Acquisition Corp. shall as of such date be deemed to be outstanding shares of
DPC Acquisition Corp.'s common stock equal in number to the same number of
shares for which such convertible stock, PIK stock, bonds, options, rights,
warrants and other securities may then be exchanged, exercised or converted
pursuant to the terms thereof.
(l) Pension Plans. Borrower will not, and it
will not cause or permit any of its Subsidiaries to, (a) permit any condition
to exist in connection with any Pension Plan which might constitute grounds for
the PBGC to institute proceedings to have such Pension Plan terminated or a
trustee appointed to administer such Pension Plan or (b) engage in, or permit
to exist or occur, any other condition, event or transaction with respect to
any Pension Plan which could result in the incurrence by Borrower, any
Subsidiary or any ERISA Affiliate of any material liability, fine or penalty.
Borrower will not, and it will not cause or permit any of its Subsidiaries to,
become obligated to contribute to any Pension Plan or Multi-Employer Plan other
than any such plan or plans in existence on the date hereof, except in
connection with an Acceptable Acquisition and except in connection with the
opening of a new facility as permitted under this Agreement as such new Pension
Plan or Multi-Employer Plan may be required in any applicable union contract,
if any.
(m) Change in Management. Borrower will not
terminate or make any substantial change in the duties of Xxx X. Xxxxxxxx as
President of Borrower, or R. Xxxx Xxxx
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73
as Vice President/Finance of Borrower, or Xxxxx Xxxxxxx as Vice President/Sales
of Borrower, without notice to the Agent and the Banks within 10 days of any
such change.
(n) Subordinated Indebtedness. Borrower will not
(i) make any optional prepayments on any of its Subordinated Indebtedness or of
the Senior Unsecured Notes, or (ii) make any payments of principal, interest or
other amounts on or with respect to any of its Subordinated Indebtedness to the
extent prohibited by the subordination provisions governing the same.
(o) Limitations on Acquisitions. Borrower will
not, and it will not cause or permit any Subsidiary or Unrestricted Subsidiary
to, make or suffer to exist any Acquisition of any Person, except Acceptable
Acquisitions.
(p) Restricted Investments. Borrower will not,
and it will not cause or permit any of its Subsidiaries to, directly or
indirectly, make any Restricted Investments.
(q) Ownership of Subsidiaries. Borrower will not
cause or permit any of its Subsidiaries to (i) authorize or issue any new
types, varieties or classes of capital stock or any bonds or debentures,
subordinated or otherwise, or any stock warrants or options, (ii) authorize or
issue any additional shares of any existing class of capital stock, (iii)
declare any stock dividends or stock splits or (iv) take any other action which
could, directly or indirectly, decrease Borrower's ownership interest in any of
its Subsidiaries.
10.3 Use of Proceeds. Borrower covenants and agrees that
(i) the proceeds of the Revolving Credit Loans and Swing Loans will be used
solely for working capital purposes and other general corporate purposes of
Borrower; (ii) the proceeds of the Term Loan have been used solely to complete
DPC Acquisition Corp.'s and Borrower's acquisition and cancellation of all of
the outstanding capital stock owned by the Selling Shareholders in the Acquired
Company, and the Acquired Company's merger into Borrower pursuant to that
certain Agreement and Plan of Merger dated August 31, 1995 and for other
general corporate purposes of Borrower; (iii) no part of the proceeds of any
Loan will be used in violation of any applicable law or regulation; and (iv) no
part of the proceeds of any Loan will be used, whether directly or indirectly,
and whether immediately, incidentally or ultimately (A) to purchase or carry
margin stock or to extend credit to others for the purpose of purchasing or
carrying margin stock, or to refund or repay indebtedness originally incurred
for such purpose or (B) for any purpose which entails a violation of, or which
is inconsistent with, the provisions of any of the Regulations of The Board of
Governors of the Federal Reserve System, including, without limitation,
Regulations G, U, T or X thereof, as amended.
SECTION 11. EVENTS OF DEFAULT.
If any of the following (each of the following herein
sometimes called an "Event of Default") shall occur and be continuing:
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11.1 Borrower shall fail to pay any of Borrower's
Obligations other than principal within five (5) days after the date the same
shall first become due and payable, whether by reason of demand, maturity,
acceleration or otherwise;
11.2 Borrower shall fail to pay any of Borrower's
Obligations for the repayment of principal as and when the same shall become
due and payable, whether by reason of demand, maturity, acceleration or
otherwise;
11.3 Any representation or warranty of Borrower made in
this Agreement, in any other Transaction Document to which Borrower is a party
or in any certificate, agreement, instrument or statement furnished or made or
delivered pursuant hereto or thereto or in connection herewith or therewith,
shall prove to have been untrue or incorrect in any material respect when made
or effected;
11.4 Borrower shall fail to perform or observe any term,
covenant or provision contained in Section 4.3, Section 10.1(c) (other than
with respect to the payment of fees and expenses due thereunder to which
Section 11.1 above shall apply), Section 10.1(k)(i), Section 10.1(l), Section
10.1(m), Section 10.1(n), Section 10.2 or Section 10.3;
11.5 Borrower shall fail to perform or observe any term,
covenant or provision contained in Section 10.1(a) and any such failure shall
remain unremedied for one (1) Domestic Business Day after the earlier of (i)
notice of such default is given to Borrower by the Agent or any of the Banks or
(ii) a Responsible Officer of Borrower obtaining knowledge of such default;
11.6 Borrower shall fail to perform or observe any other
term, covenant or provision contained in this Agreement (other than those
specified in Sections 11.1, 11.2, 11.3, 11.4 or 11.5 above or elsewhere in this
Section 11) and any such failure shall remain unremedied for thirty (30) days
after the earlier of (i) written notice of default is given to Borrower by the
Agent or any of the Banks or (ii) a Responsible Officer of Borrower obtaining
knowledge of such default;
11.7 This Agreement or any of the other Transaction
Documents shall at any time for any reason cease to be in full force and effect
or shall be declared to be null and void by a court of competent jurisdiction,
or if the validity or enforceability thereof shall be contested or denied by
Borrower, or if the transactions completed hereunder or thereunder shall be
contested by Borrower or if Borrower shall deny that it has any or further
liability or obligation hereunder or thereunder;
11.8 Borrower, any Subsidiary or any other Obligor shall
(i) voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code or any other Federal, state or foreign
bankruptcy, insolvency, receivership, liquidation or similar law, (ii) consent
to the institution of, or fail to contravene in a timely and appropriate
manner, any such proceeding or the filing of any such petition, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator
or similar official of itself, himself or herself or of a substantial part of
its Property or assets, (iv) file an answer admitting the material allegations
of a petition filed against itself in any such proceeding, (v) make a general
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assignment for the benefit of creditors, (vi) become unable, admit in writing
its inability or fail generally to pay its debts as they become due or (vii)
take any corporate or other action for the purpose of effecting any of the
foregoing;
11.9 An involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of Borrower, any Subsidiary or any other Obligor,
or of a substantial part of the Property or assets of Borrower, any Subsidiary
or any other Obligor, under Title 11 of the United States Code or any other
Federal, state or foreign bankruptcy, insolvency, receivership, liquidation or
similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator or similar official of Borrower, any Subsidiary or any other
Obligor or of a substantial part of the Property or assets of Borrower, any
Subsidiary or any other Obligor or (iii) the winding-up or liquidation of
Borrower, any Subsidiary or any other Obligor; and such proceeding or petition
shall continue undismissed for sixty (60) consecutive days or an order or
decree approving or ordering any of the foregoing shall be entered;
11.10 Any of the Letter of Credit Applications shall at any
time for any reason cease to be in full force and effect or shall be declared
to be null and void by a court of competent jurisdiction, or if the validity or
enforceability of any of the Letter of Credit Applications shall be contested
or denied by Borrower, or if Borrower shall deny that it has any further
liability or obligation under any of the Letter of Credit Applications or if
Borrower shall fail to comply with or observe any of the terms, provisions or
conditions contained in any of the Letter of Credit Applications;
11.11 Borrower, any Subsidiary, any other Obligor, or any
Unrestricted Subsidiary shall be declared by any of the Banks to be in default
on, or pursuant to the terms of, (1) any other present or future obligation to
such Bank(s), including, without limitation, any other loan, line of credit,
revolving credit, guaranty or letter of credit reimbursement obligation, or (2)
any other present or future agreement purporting to convey to such Bank(s) a
Lien upon any Property or assets of Borrower, such Subsidiary, such other
Obligor or such Unrestricted Subsidiary, as the case may be;
11.12 The occurrence of any event of default (as defined
therein) under or within the meaning of the Security Agreement;
11.13 The occurrence of any event of default (as defined
therein) under or within the meaning of any of the Deeds of Trust;
11.14 The occurrence of any event of default (as defined
therein) under or within the meaning of the Collateral Assignment;
11.15 The occurrence of any event of default (as defined
therein) under or within the meaning of the Pledge Agreement.
11.16 The occurrence of any event of default under or
within the meaning of that certain Indenture dated as of March 4, 1996 made by
Borrower and United States Trust
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76
Company of Texas, N.A., as trustee, or any of the Senior Unsecured Notes issued
pursuant thereto in the original principal amount of up to $160,000,000.00;
11.17 The occurrence of any default or event of default
under or within the meaning of any agreement, document or instrument
evidencing, securing, guaranteeing the payment of or otherwise relating to any
Indebtedness of Borrower or any Subsidiary for borrowed money (other than the
Borrower's Obligations) having an aggregate outstanding principal balance in
excess of Two Million Five Hundred Thousand Dollars ($2,500,000.00);
11.18 Borrower, any Subsidiary or any other Obligor shall
have a judgment entered against it by a court having jurisdiction in the
premises which, when aggregated with any other judgments then entered against
Borrower, any Subsidiary or any other Obligor, shall exceed $2,500,000.00 in
the aggregate, and such judgment shall not be appealed in good faith or
satisfied by Borrower, such Subsidiary or such other Obligor, as the case may
be, within thirty (30) days after the entry of such judgment;
11.19 The occurrence of a Reportable Event with respect to
any Pension Plan; the filing of a notice of intent to terminate a Pension Plan
by Borrower, any ERISA Affiliate or any Subsidiary; the institution of
proceedings to terminate a Pension Plan by the PBGC or any other Person; the
withdrawal in a "complete withdrawal" or a "partial withdrawal" as defined in
Sections 4203 and 4205, respectively, of ERISA by Borrower, any ERISA Affiliate
or any Subsidiary from any Multiemployer Plan; or the incurrence of any
material increase in the contingent liability of Borrower or any Subsidiary
with respect to any "employee welfare benefit plan" as defined in Section 3(1)
of ERISA which covers retired employees and their beneficiaries, but only if
such occurrence or group of occurrences at any time existing are reasonably
likely to result in a Material Adverse Effect; or
11.20 The institution by Borrower, any ERISA Affiliate or
any Subsidiary of steps to terminate any Pension Plan if, in order to
effectuate such termination, Borrower, such ERISA Affiliate or such Subsidiary,
as the case may be, would be required to make a contribution to such Pension
Plan, or would incur a liability or obligation to such Pension Plan, in excess
of Two Million Five Hundred Thousand Dollars ($2,500,000.00); or the
institution by the PBGC of steps to terminate any Pension Plan;
THEN, and in each such event (other than an event described in
Sections 11.8 or 11.9), the Agent shall, if requested in writing by the
Required Banks, and may, in its sole and absolute discretion, upon the oral
request of the Required Banks, declare that the obligation of the Banks to make
Loans under this Agreement and the obligation of Mercantile to issue Letters of
Credit under this Agreement have terminated, whereupon such obligations of the
Banks and Mercantile shall be immediately and forthwith terminated, and the
Agent shall, if requested in writing by the Required Banks, and may, in its
sole and absolute discretion, upon the oral request of the Required Banks,
declare the entire outstanding principal balance of and all accrued and unpaid
interest on the Notes and all of the other Loans under this Agreement and all
of the other Borrower's Obligations to be forthwith due and payable, whereupon
all of the unpaid principal balance of and all accrued and unpaid interest on
the Notes and all of the other Loans under this Agreement and all such other
Borrower's Obligations shall become and be
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immediately due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by Borrower, and
the Agent and each of the Banks may exercise any and all other rights and
remedies which they may have under any of the other Transaction Documents or
under applicable law; provided, however, that upon the occurrence of any event
described in Sections 11.8 or 11.9, the obligation of the Banks to make Loans
under this Agreement and the obligation of Mercantile to issue Letters of
Credit under this Agreement shall automatically terminate and the entire
outstanding principal balance of and all accrued and unpaid interest on the
Notes and all of the other Loans under this Agreement and all of the other
Borrower's Obligations shall automatically become immediately due and payable,
without presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by Borrower, and the Agent and each of the
Banks may exercise any and all other rights and remedies which they may have
under any of the other Transaction Documents or under applicable law.
SECTION 12. AGENT.
12.1 Appointment. Mercantile Bank of St. Louis National
Association is hereby appointed by the Banks as Agent under this Agreement, the
Notes and the other Transaction Documents. The Agent agrees to act as such
upon the express conditions contained in this Agreement.
12.2 Powers. The Agent shall have and may exercise such
powers hereunder as are specifically delegated to the Agent by the terms of
this Agreement and the other Transaction Documents, together with such powers
as are reasonably incidental thereto. The Agent shall have no implied duties
to the Banks, nor any obligation to the Banks to take any action under this
Agreement or any of the other Transaction Documents, except any action
specifically provided by the this Agreement or any of the other Transaction
Documents to be taken by the Agent. Without limiting the generality of the
foregoing, the Agent shall not be required to take any action with respect to
any Default or Event of Default, except as expressly provided in Section 11.
12.3 General Immunity. Neither the Agent nor any of its
directors, officers, employees, agents or advisors shall be liable to any of
the Banks for any action taken or not taken by it in connection herewith (i)
with the consent or at the request of the Required Banks or (ii) in the absence
of its own gross negligence or willful misconduct.
12.4 No Responsibility for Loans, Recitals, etc. Neither
the Agent nor any of its directors, officers, employees, agents or advisors
shall (i) be responsible for or have any duty to ascertain, inquire into or
verify any recitals, reports, statements, representations, warranties or
representations contained in this Agreement or any of the other Transaction
Documents or furnished pursuant hereto or thereto; (ii) be responsible for any
Loans or Letters of Credit hereunder (except in Agent's capacity as a Bank
hereunder with respect to its Pro Rata Share thereof pursuant to the terms of
this Agreement), (iii) be bound to ascertain or inquire as to the performance
or observance of any of the terms of this Agreement or any of the other
Transaction Documents; (iv) be responsible for the satisfaction of any
condition specified in Section 7, except receipt of items required to be
delivered to the Agent; or (v) be responsible
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for the validity, effectiveness, genuineness or enforceability of this
Agreement or any of the other Transaction Documents; or (vi) be responsible for
the creation, attachment or perfection of any security interests or liens
purported to be granted to the Agent or any of the Banks pursuant to this
Agreement or any of the other Transaction Documents. The Agent shall not incur
any liability by acting in reliance upon any notice, consent, certificate,
statement or other writing (which may be a bank wire, telex, telecopy or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties.
12.5 Right to Indemnity. Notwithstanding any other
provision contained in this Agreement to the contrary, to the extent Borrower
fails to reimburse the Agent pursuant to Section 13.3, Section 13.4 or Section
13.5, or if any Default or Event of Default shall occur under this Agreement,
the Banks shall ratably in accordance with their respective Pro Rata Shares of
the aggregate amount of Loans and Letters of Credit then outstanding, or if no
Loans or Letters of Credit are then outstanding, their respective Pro Rata
Shares of the total Commitments of all of the Banks, indemnify the Agent and
hold it harmless from and against any and all liabilities, losses (except
losses occasioned solely by failure of Borrower to make any payments or to
perform any obligations required by this Agreement (other than those described
in Sections 13.3, 13.4 and 13.5), the Notes, the Letter of Credit Applications
or any of the other Transaction Documents), costs and/or expenses, including,
without limitation, any liabilities, losses, costs and/or expenses arising from
the failure of any Bank to perform its obligations hereunder or in respect of
this Agreement, and also including, without limitation, reasonable attorneys'
fees and expenses, which the Agent may incur, directly or indirectly, in
connection with this Agreement, the Notes or any of the other Transaction
Documents, or any action or transaction related hereto or thereto; provided
only that the Agent shall not be entitled to such indemnification for any
losses, liabilities, costs and/or expenses directly and solely resulting from
its own gross negligence or willful misconduct. This indemnity shall be a
continuing indemnity, contemplates all liabilities, losses, costs and expenses
related to the execution, delivery and performance of this Agreement, the Notes
and the other Transaction Documents, and shall survive the satisfaction and
payment of the Loans, the expiration or other termination of the Letters of
Credit and the termination of this Agreement.
12.6 Action Upon Instructions of Required Banks. The
Agent agrees, upon the written request of the Required Banks, to take any
action of the type specified in this Agreement or any of the other Transaction
Documents as being within the Agent's rights, duties, powers or discretion.
Notwithstanding the foregoing, the Agent shall be fully justified in failing or
refusing to take any action hereunder, unless it shall first be indemnified to
its satisfaction by the Banks pro rata against any and all liabilities, losses,
costs and expenses (including, without limitation, attorneys' fees and
expenses) which may be incurred by it by reason of taking or continuing to take
any such action, other than any liability which may arise out of Agent's gross
negligence or willful misconduct. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
written instructions signed by the Required Banks, and such instructions and
any action taken or failure to act pursuant thereto shall be binding on all of
the Banks and on all holders of the Notes. In the absence of a request by the
Required Banks, the Agent shall have authority, in its sole discretion, to take
or not to take any action, unless this Agreement or any of the other
Transaction Documents specifically requires the consent of the Required Banks
or of all of the Banks.
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12.7 Reliance on Documents; Employment of Agents and
Counsel. The Agent shall be entitled to rely upon any note, notice, consent,
certificate, affidavit, letter, telegram, statement, paper or document believed
by it to be genuine and correct and to have been signed or sent by the proper
person or persons. The Agent may execute any of its duties as Agent hereunder
by or through employees, agents, and attorneys-in-fact and shall not be
answerable to the Banks for the default or misconduct of any such agents or
attorneys-in-fact selected by it in good faith and with reasonable care, except
as to money or securities received by it or its authorized agents. The Agent
shall be entitled to advice and opinion of legal counsel concerning all legal
matters and all matters pertaining to the duties of the Agent.
12.8 May Treat Payee as Owner. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes hereof unless
and until a written notice of the assignment or transfer thereof shall have
been filed with the Agent pursuant to Section 13.15. Any request, authority or
consent of any person, firm or corporation who at the time of making such
request or giving such authority or consent is the holder of any such Note
shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note issued in exchange therefor.
12.9 Agent's Reimbursement. Each Bank agrees to reimburse
the Agent pro rata in accordance with its Pro Rata Share for any out-of-pocket
expenses not reimbursed by Borrower (a) for which the Agent is entitled to
reimbursement by the Borrower under this Agreement or any of the other
Transaction Documents and (b) for any other out- of-pocket expenses incurred by
the Agent on behalf of the Banks, in connection with the preparation,
execution, delivery, amendment, modification, extension, renewal,
administration and/or enforcement of this Agreement and/or any of the other
Transaction Documents.
12.10 Rights as a Bank. With respect to its commitment,
the Loans made by it and the Notes issued to it, the Agent shall have the same
rights and powers hereunder as any Bank and may exercise the same as though it
were not the Agent, and the terms "Bank" and "Banks" shall, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent
may accept deposits from, lend money to and generally engage in any kind of
banking or trust business with the Borrower as if it were not the Agent.
12.11 Independent Credit Decision. Each Bank acknowledges
that it has, independently and without reliance upon the Agent or any other
Bank and based on the financial statements referred to in Section 9.4 and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other
Transaction Documents. Each Bank also acknowledges that it will, independently
and without reliance upon the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Transaction Documents.
12.12 Resignation of Agent. Subject to the appointment of
a successor Agent, the Agent may resign as Agent for the Banks under this
Agreement and the other Transaction Documents at any time by thirty (30) days'
notice in writing to the Banks. Such resignation shall take effect upon
appointment of such successor Agent. The Required Banks shall have the
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right to appoint a successor Agent (and if no Default or Event of Default then
exists hereunder, such appointment shall be with the consent of the Borrower,
which consent shall not be unreasonably withheld), and the successor Agent
shall be entitled to all of the rights of, and vested with the same powers as,
the original Agent under this Agreement and the other Transaction Documents.
In the event a successor Agent shall not have been appointed within the thirty
(30) day period following the giving of notice by the Agent, the Agent may
appoint its own successor. Resignation by the Agent shall not affect or impair
the rights of the Agent under Sections 12.5 and 12.9 hereof with respect to all
matters preceding such resignation. Any successor Agent must be a national
banking association or a bank chartered in any State of the United States and
having at least $400,000,000.00 in capital and surplus.
12.13 Removal of Agent. Subject to the appointment of a
successor Agent, the Banks (by a unanimous vote of all Banks other than the
Bank then acting as the Agent hereunder), may remove the Agent for the Banks
under this Agreement and the other Transaction Documents at any time by thirty
(30) days' notice in writing to the Agent. Such removal shall take effect upon
appointment of such successor Agent. The Required Banks shall have the right
to appoint a successor Agent who shall be entitled to all of the rights of, and
vested with the same powers as, the original Agent under this Agreement and the
other Transaction Documents. If no Default or Event of Default then exists
hereunder, then the decision to remove the Agent and the subsequent appointment
of a successor Agent shall both be made only with the consent of the Borrower
(which consent will not be unreasonably withheld). In the event a successor
Agent shall not have been appointed within the thirty (30) day period following
the giving of notice to the Agent, the Agent may appoint its own successor.
The removal of the Agent shall not affect or impair the rights of the Agent
under Sections 12.5 and 12.9 hereof with respect to all matters preceding such
removal. Any successor Agent must be a national banking association or a bank
chartered in any State of the United States and having at least $400,000,000.00
in capital and surplus.
12.14 Duration of Agency. The agency established by
Section 12.1 hereof shall continue, and Sections 12.1 through and including
this Section 12.14 shall remain in full force and effect, until all of the
Borrowers' Obligations shall have been paid in full and the Banks' commitments
to make Loans, issue Letters of Credit and/or extend credit to or for the
benefit of the Borrower shall have terminated or expired.
SECTION 13. GENERAL.
13.1 No Waiver. No failure or delay by the Agent or any
of the Banks in exercising any right, remedy, power or privilege hereunder or
under any other Transaction Document shall operate as a waiver thereof; nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege. The remedies provided herein and in the other Transaction Documents
are cumulative and not exclusive of any remedies provided by law. Nothing
herein contained shall in any way affect the right of any of the Banks to
exercise any statutory or common law right of banker's lien or setoff.
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13.2 Right of Setoff. Upon the occurrence and during the
continuance of any Event of Default, each of the Banks is hereby authorized at
any time and from time to time, without notice to Borrower (any such notice
being expressly waived by Borrower) and to the fullest extent permitted by law,
to setoff and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by such Bank(s) and any and all other
indebtedness at any time owing by such Bank(s) to or for the credit or account
of Borrower against any and all of Borrower's Obligations irrespective of
whether or not such Bank(s) shall have made any demand hereunder or under any
of the other Transaction Documents and although such obligations may be
contingent or unmatured. Each of the Banks agrees to promptly notify Borrower
after any such setoff and application made by such Bank(s), provided, however,
that the failure to give such notice shall not affect the validity of such
setoff and application. The rights of the Banks under this Section 13.2 are in
addition to any other rights and remedies (including, without limitation, other
rights of setoff) which the Banks may have. Nothing contained in this
Agreement or any other Transaction Document shall impair the right of any of
the Banks to exercise any right of setoff or counterclaim it may have against
Borrower and to apply the amount subject to such exercise to the payment of
indebtedness of Borrower unrelated to this Agreement or the other Transaction
Documents.
13.3 Cost and Expenses. Borrower agrees, whether or not
any Loan is made hereunder or any Letter of Credit is issued hereunder, to pay
the Agent upon demand (i) all out-of-pocket costs and expenses and all
Attorneys' Fees of the Agent in connection with the preparation, documentation,
negotiation, execution, amendment, modification, extension and/or renewal of
this Agreement, the Notes, the Letter of Credit Application(s), the Security
Agreement, the Deeds of Trust, the Collateral Assignment, the Pledge Agreement
and the other Transaction Documents, (ii) all recording, filing and search fees
and expenses and title insurance premiums, if any, incurred in connection with
this Agreement and the other Transaction Documents, (iii) all reasonable
out-of-pocket costs and expenses and all Attorneys' Fees of the Agent in
connection with the preparation of any waiver or consent hereunder, (iv) if an
Event of Default occurs, all out-of-pocket costs and expenses and all
reasonable Attorneys' Fees incurred by the Agent and each of the Banks in
connection with such Event of Default and collection and other enforcement
proceedings resulting therefrom and (v) all other Attorneys' Fees incurred by
the Agent relating to or arising out of or in connection with this Agreement or
any of the other Transaction Documents. Borrower further agrees to pay or
reimburse the Agent and each of the Banks for any stamp or other taxes which
may be payable with respect to the execution, delivery, recording and/or filing
of this Agreement, the Notes, the Letter of Credit Application(s), the Security
Agreement, the Deeds of Trust, the Collateral Assignment, the Pledge Agreement
or any of the other Transaction Documents. All of the obligations of Borrower
under this Section 13.3 shall survive the satisfaction and payment of
Borrower's Obligations and the termination of this Agreement.
13.4 Environmental Indemnity. Borrower hereby agrees to
indemnify the Agent and each of the Banks and hold the Agent and each of the
Banks harmless from and against any and all losses, liabilities, damages,
injuries, costs, expenses and claims of any and every kind whatsoever
(including, without limitation, court costs and attorneys' fees and expenses)
which at any time or from time to time may be paid, incurred or suffered by, or
asserted against, the Agent or any of the Banks for, with respect to or as a
direct or indirect result of the violation
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by Borrower, any Subsidiary or any Unrestricted Subsidiary of any Environmental
Laws; or with respect to, or as a direct or indirect result of the presence on
or under, or the escape, seepage, leakage, spillage, discharge, emission or
Release from, properties utilized by Borrower, any Subsidiary and/or any
Unrestricted Subsidiary in the conduct of their respective businesses into or
upon any land, the atmosphere or any watercourse, body of water or wetland, of
any Hazardous Substances or any other hazardous or toxic waste, substance or
constituent or other substance (including, without limitation, any losses,
liabilities, damages, injuries, costs, expenses or claims asserted or arising
under the Environmental Laws); and the provisions of and undertakings and
indemnification set out in this Section 13.4 shall survive the satisfaction and
payment of Borrower's Obligations and the termination of this Agreement;
provided that Borrower shall have no obligation to an Indemnitee hereunder with
respect to indemnified liabilities arising from the gross negligence or willful
misconduct of that Indemnitee as determined by a court of competent
jurisdiction in a final nonappealable order.
13.5 General Indemnity. In addition to the payment of
expenses pursuant to Section 13.3, whether or not the transactions contemplated
hereby shall be consummated, Borrower hereby agrees to indemnify, pay and hold
the Agent and each of the Banks and any holder(s) of the Notes, and the
officers, directors, employees, agents and affiliates of the Agent, each of the
Banks and such holder(s) (collectively, the "Indemnitees") harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, the reasonable fees
and disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitees shall be designated a party thereto), that may
be imposed on, incurred by or asserted against the Indemnitees, in any manner
relating to or arising out of this Agreement, any of the other Transaction
Documents or any other agreement, document or instrument executed and delivered
by Borrower or any other Obligor in connection herewith or therewith, the
statements contained in any commitment letters delivered by the Agent or any of
the Banks, the agreement of any of the Banks to make the Loans hereunder, the
agreement of Mercantile to issue the Letters of Credit hereunder or the use or
intended use of the proceeds of any Loan hereunder (collectively, the
"indemnified liabilities"); provided that Borrower shall have no obligation to
an Indemnitee hereunder with respect to indemnified liabilities arising from
the gross negligence or willful misconduct of that Indemnitee as determined by
a court of competent jurisdiction in a final nonappealable order. To the
extent that the undertaking to indemnify, pay and hold harmless set forth in
the preceding sentence may be unenforceable because it is violative of any law
or public policy, Borrower shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all indemnified liabilities incurred by the Indemnitees or any
of them. The provisions of the undertakings and indemnification set out in
this Section 13.5 shall survive satisfaction and payment of Borrower's
Obligations and the termination of this Agreement.
13.6 Authority to Act. The Agent shall be entitled to act
on any notices and instructions (telephonic or written) believed by the Agent
in good faith to have been sent or delivered by any person identifying himself
or herself as R. Xxxx Xxxx, Xxx X. Xxxxxxxx or Xxxxx Xxxx (or any other person
from time to time authorized to act on behalf of Borrower pursuant to a
resolution adopted by the Board of Directors of Borrower and certified by the
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Secretary of Borrower and delivered to the Agent), regardless of whether such
notice or instruction was in fact delivered by such person, and Borrower hereby
agrees to indemnify the Agent and hold the Agent harmless from and against any
and all losses and expenses, if any, ensuing from any such action.
13.7 Notices. Any notice, request, demand, consent,
confirmation or other communication hereunder shall be in writing and delivered
in person or sent by telecopy or registered or certified mail, return receipt
requested and postage prepaid, to the applicable party at its address or
telecopy number set forth on the signature pages hereof, or at such other
address or telecopy number as any party hereto may designate as its address for
communications hereunder by notice so given. Such notices shall be deemed
effective on the day on which delivered or sent if delivered in person or sent
by telecopy, or on the third (3rd) Domestic Business Day after the day on which
mailed, if sent by registered or certified mail; provided, however, that
notices to the Agent under Section 3 shall not be effective until actually
received by the Agent.
13.8 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
BORROWER IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY MISSOURI
STATE COURT OR ANY UNITED STATES OF AMERICA COURT SITTING IN THE EASTERN
DISTRICT OF MISSOURI, AS THE AGENT MAY ELECT, IN ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.
BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT TO SUCH SUIT,
ACTION OR PROCEEDING MAY BE HELD AND DETERMINED IN ANY OF SUCH COURTS.
BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH BORROWER MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT, AND BORROWER
FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. BORROWER
AUTHORIZES THE SERVICE OF PROCESS UPON BORROWER BY REGISTERED MAIL SENT TO
BORROWER AT ITS ADDRESS SET FORTH IN SECTION 13.7. BORROWER, THE AGENT AND THE
BANKS IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION
IN WHICH BORROWER AND THE AGENT AND/OR ANY OF THE BANKS ARE PARTIES RELATING TO
OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER
TRANSACTION DOCUMENTS.
13.9 Sharing of Payments. The Banks agree among
themselves that except as otherwise expressly set forth herein, in the event
that any of the Banks shall directly or indirectly obtain any payment (whether
voluntary, involuntary, through the exercise of any right of setoff, banker's
lien or counterclaim, through the realization, collection, sale or liquidation
of any collateral or otherwise) on account of or in respect of any of the Loans
or other Borrower's Obligations in excess of its Pro Rata Share of all such
payments, such Bank(s) shall immediately purchase from the other Bank(s)
participations in the Loans or other Borrower's Obligations owed to such other
Bank(s) in such amounts, and make such other adjustments from time to
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time, as shall be equitable to the end that the Banks share such payment
ratably in accordance with their respective Pro Rata Shares of the outstanding
Loans and other Borrower's Obligations; provided, however, that nothing in this
Section shall impair the right of any Bank to exercise any right of setoff or
counterclaim it may have and to apply the amount subject to such exercise to
the payment of indebtedness of Borrower other than its indebtedness under the
Notes. The Banks further agree among themselves that if any such excess
payment to a Bank shall be rescinded or must otherwise be restored, the other
Bank(s) which shall have shared the benefit of such payment shall, by
repurchase of participation theretofore sold, or otherwise, return its share of
that benefit to the Bank whose payment shall have been rescinded or otherwise
restored. Borrower agrees, to the fullest extent it may effectively do so
under applicable law, that any holder of a participation in any of the
Borrower's Obligations, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of setoff, banker's lien or counterclaim and
other rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law any of the Banks receives a secured claim in lieu of a setoff to which this
Section 13.9 would apply, such Bank(s) shall, to the extent practicable,
exercise their rights in respect of such secured claim in a manner consistent
with the rights of the Bank(s) entitled under this Section 13.9 to share in the
benefits of any recovery of such secured claim.
13.10 Governing Law. This Agreement, the Notes, the Letter
of Credit Application(s), the Security Agreement, the Collateral Assignment,
the Pledge Agreement and all of the other Transaction Documents (other than
those Deeds of Trust on real property not located in the State of Missouri)
shall be governed by and construed in accordance with the internal laws of the
State of Missouri.
13.11 Amendments and Waivers. Any provision of this
Agreement, the Notes, the Letter of Credit Application(s), the Security
Agreement, the Deeds of Trust, the Collateral Assignment, the Pledge Agreement
or any of the other Transaction Documents may be amended or waived if, but only
if, such amendment or waiver is in writing and is signed by Borrower and the
Required Banks (and, if the rights or duties of the Agent in its capacity as
Agent are affected thereby, by the Agent); provided that no such amendment or
waiver shall, unless signed by all of the Banks, (i) increase the Commitment of
any Bank, (ii) reduce the principal amount of or rate of interest on any Loan
or any fees hereunder (other than any fees relating to the Letters of Credit
other than Letter of Credit Commitment Fees), (iii) postpone the date fixed for
any payment of principal of or interest on any Loan or any fees hereunder, (iv)
change the Pro Rata Share of the Commitments or of the aggregate principal
amount of Loans or Letters of Credit of any Bank, (v) release any collateral
for Borrower's Obligations, or (vi) change the number of Banks which shall be
required for the Banks or any of them to take any action or obligations under
this Section or any other provision of this Agreement including this Section
13.11.
13.12 References; Headings for Convenience. Unless
otherwise specified herein, all references herein to Section numbers refer to
Section numbers of this Agreement, all references herein to Exhibits X, X, X,
X, X, X, X, X, X and J refer to annexed Exhibits X, X, X, X, X, X, X, X, X and
J which are hereby incorporated herein by reference and all references herein
to Schedules 8.1, 9.5, 9.6, 9.7, 9.8, 9.10, 9.11, 9.16, 9.17, 9.18, 9.20 and
10.2(b) refer
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to annexed Schedules 8.1, 9.5, 9.6, 9.7, 9.8, 9.10, 9.11, 9.16, 9.17, 9.18,
9.20 and 10.2(b) which are hereby incorporated herein by reference. The
Section headings are furnished for the convenience of the parties and are not
to be considered in the construction or interpretation of this Agreement.
13.13 Subsidiary Reference. Any reference herein to a
Subsidiary of Borrower, and any financial definition, ratio, restriction or
other provision of this Agreement which is stated to be applicable to Borrower
and its Subsidiaries or which is to be determined on a "consolidated" or
"consolidating" basis, shall apply only to the extent Borrower has any
Subsidiaries, where applicable, to the extent any such Subsidiaries are
consolidated with Borrower for financial reporting purposes. Any reference
herein to an Unrestricted Subsidiary of Borrower or any of its Subsidiaries,
and any restriction or other provision of this Agreement which is stated to be
applicable to Borrower and its Subsidiaries and Unrestricted Subsidiaries or
which is to be determined on a "consolidated" or "consolidating" basis, shall
apply only to the extent Borrower has any such Unrestricted Subsidiaries, where
applicable, to the extent any such Unrestricted Subsidiaries are consolidated
with Borrower for financial reporting purposes; provided, however, that
Unrestricted Subsidiaries shall not be consolidated with Borrower and its
Subsidiaries for purposes of calculating the financial covenants set forth in
Section 10.1(m) herein.
13.14 Successors and Assigns; Participations.
(a) The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that Borrower may not assign or
otherwise transfer any of its rights or delegate any of its obligations under
this Agreement. Any Bank may sell participations in its Notes and its rights
under this Agreement in whole or in part to any commercial bank organized under
the laws of the United States or any state thereof that is a member of both the
Federal Deposit Insurance Corporation and the Federal Reserve System without
the consent of Borrower or the Agent so long as each agreement pursuant to
which any such participation is granted provides that no such participant shall
have any rights under this Agreement or any other Transaction Document (the
participants' rights against the Bank granting its participation to be those
set forth in the Participation Agreement between the participant and such
Bank), and such selling Bank shall retain the sole right to approve or
disapprove any amendment, modification or waiver of any provision of this
Agreement or any of the other Transaction Documents. Each such participant
shall be entitled to the benefits of the yield protection provisions hereof to
the extent such Bank would have been so entitled had no such participation been
sold.
(b) Any Bank which, in accordance with Section
13.14(a), grants a participation in any of its rights under this Agreement or
its Notes shall give prompt notice thereof to the Agent and Borrower.
(c) Unless otherwise agreed to by Borrower in
writing, no Bank shall, as between Borrower and that Bank, be relieved of any
of its obligations under this Agreement as a result of such Bank's granting of
a participation in all or any part of such Bank's Notes or all or any part of
such Bank's rights under this Agreement.
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13.15 Assignment Agreements. Each Bank may, from time to
time, with the consent of the Borrower and Agent (which will not in any
instance be unreasonably withheld), sell or assign to other banking
institutions rated "B" or better by Xxxxxxxx Bank Watch Service a pro rata part
of all of the indebtedness evidenced by the Notes then owed by it together with
an equivalent proportion of its obligation to make Loans hereunder and the
credit risk incidental to the Letters of Credit pursuant to an Assignment
Agreement substantially in the form of Exhibit J attached hereto, executed by
the assignor, the assignee and the Borrower, which agreements shall specify in
each instance the portion of the indebtedness evidenced by the Notes which is
to be assigned to each such assignor and the portion of the Commitments of the
assignor and the credit risk incidental to the Letters of Credit (which
portions shall be equivalent) to be assumed by it (the "Assignment
Agreements"), provided that the Borrower may in its sole discretion withhold
its consent to any assignment by a Bank to any assignee which has total capital
and surplus of less than $200,000,000.00 or to any assignment by a Bank of less
than all of its Commitments if as a result thereof the assignor will have
Commitments hereunder of less than one half of its assigned Commitments or the
assignee will have Commitments hereunder of less than $3,500,000.00 or, after
giving effect thereto, there would be more than 10 Banks, further provided that
nothing herein contained shall restrict, or be deemed to require any consent as
a condition to, or require payment of any fee in connection with, any sale,
discount or pledge by any Bank of any Note or other obligation hereunder to a
Federal reserve bank. Upon the execution of each Assignment Agreement by the
assignor, the assignee and the Borrower and consent thereto by the Agent (i)
such assignee shall thereupon become a "Bank" for all purposes of this
Agreement with a Commitment in the amount set forth in such Assignment
Agreement and with all the rights, powers and obligations afforded a Bank
hereunder, (ii) the assignor shall have no further liability for funding the
portion of its Commitments assumed by such other Bank and (iii) the address for
notices to such Bank shall be as specified in the Assignment Agreement, and the
Borrower shall execute and deliver Notes to the assignee Bank in the amount of
its Commitments and new Notes to the assignor Bank in the amount of its
Commitments after giving effect to the reduction occasioned by such assignment,
all such Notes to constitute "Notes" for all purposes of this Agreement, and
there shall be paid to the Agent, as a condition to such assignment, an
administration fee of $2,500 plus any out-of-pocket costs and expenses incurred
by it in effecting such assignment, such fee to be paid by the assignor or the
assignee as they may mutually agree, but under no circumstances shall any
portion of such fee be payable by or charged to the Borrower.
13.16 Binding Agreement. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that Borrower may not assign or
delegate any of its rights or obligations under this Agreement.
13.17 NO ORAL AGREEMENTS; ENTIRE AGREEMENT. ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT, INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT,
ARE NOT ENFORCEABLE. TO PROTECT BORROWER, THE AGENT AND THE BANKS FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS REACHED BY BORROWER, THE
AGENT AND THE BANKS COVERING SUCH MATTERS ARE CONTAINED IN THIS AGREEMENT AND
THE OTHER TRANSACTION DOCUMENTS, WHICH
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AGREEMENT AND OTHER TRANSACTION DOCUMENTS ARE A COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENTS AMONG BORROWER, THE AGENT AND THE BANKS, EXCEPT AS
BORROWER, THE AGENT AND THE BANKS MAY LATER AGREE IN WRITING TO MODIFY THEM.
THIS AGREEMENT EMBODIES THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE
PARTIES HERETO AND SUPERSEDES ALL PRIOR AGREEMENTS AND UNDERSTANDINGS (ORAL OR
WRITTEN) RELATING TO THE SUBJECT MATTER HEREOF.
13.18 Severability. In the event any one or more of the
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
13.19 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
13.20 Resurrection of Borrower's Obligations. To the
extent that any of the Banks receives any payment on account of any of
Borrower's Obligations, and any such payment(s) or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
subordinated and/or required to be repaid to a trustee, receiver or any other
Person under any bankruptcy act, state or Federal law, common law or equitable
cause, then, to the extent of such payment(s) received, Borrower's Obligations
or part thereof intended to be satisfied and any and all Liens upon or
pertaining to any Property or assets of Borrower and theretofore created and/or
existing in favor of such Bank(s) as security for the payment of such
Borrower's Obligations shall be revived and continue in full force and effect,
as if such payment(s) had not been received by such Bank(s) and applied on
account of Borrower's Obligations.
13.21 Independence of Covenants. All of the covenants
contained in this Agreement and the other Transaction Documents shall be given
independent effect so that if a particular action, event or condition is
prohibited by any one of such covenants, the fact that it would be permitted by
an exception to, or otherwise be in compliance within the provisions of,
another covenant shall not avoid the occurrence of a Default or Event of
Default if such action is taken, such event occurs or such condition exists.
- 81 -
88
IN WITNESS WHEREOF, Borrower, the Agent and the Banks have
executed this Amended and Restated Revolving Credit and Term Loan Agreement
this 28th day of February, 1996.
XXXXX PRODUCTS COMPANY
By:
----------------------------------
Xxx X. Xxxxxxxx, President
Xxxx 00xx & Xxxxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Telecopy number: (000) 000-0000
Revolving Credit Commitment: MERCANTILE BANK OF ST. LOUIS
$6,617,647.06 NATIONAL ASSOCIATION
Term Loan Commitment:
$15,882,352.94
By:
----------------------------------
Xxxx X. Xxxxxxxx, Vice President
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Telecopy number: (000) 000-0000
Revolving Credit Commitment: SOUTHTRUST BANK OF ALABAMA,
$6,617,647.06 NATIONAL ASSOCIATION
Term Loan Commitment:
$15,882,352.94
By:
----------------------------------
Xxxxxxx X. Xxxxxxx, Vice President
Metropolitan Lending
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telecopy number: (000) 000-0000
- 82 -
89
Revolving Credit Commitment: XXXXXX TRUST AND SAVINGS BANK
$3,446,291.54
Term Loan Commitment:
$8,271,099.76
By:
-------------------------------------
Xxxxxxx X. Xxxx, Vice President
000 Xxxx Xxxxxx Xxxxxx
P. O. Xxx 000
Xxxxxxx, Xxxxxxxx 00000-0000
Telecopy number: (000) 000-0000
Revolving Credit Commitment: HIBERNIA NATIONAL BANK
$3,970,588.24
Term Loan Commitment:
$9,529,411.76
By:
------------------------------------
Xxxxxx X. Xxxxxxx, Vice President
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Telecopy number: (000) 000-0000
Revolving Credit Commitment: NBD BANK
$2,173,913.05
Term Loan Commitment:
$5,217,391.30
By:
------------------------------------
Xxxxxx X. XxXxxxxx, Vice President
National Banking Division
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy number: (000) 000-0000
Revolving Credit Commitment: BANK OF OKLAHOMA, N.A.
$2,173,913.05
Term Loan Commitment:
$5,217,391.30
By:
-------------------------------------
Xxxx X. Xxxxxxxxxxxx, Vice President
Xxx Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Telecopy number: (000) 000-0000
- 83 -
90
MERCANTILE BANK OF ST. LOUIS
NATIONAL ASSOCIATION, as Agent
By:
---------------------------------------
Xxxx X. Xxxxxxxx, Vice President
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Telecopy number: (000) 000-0000
- 84 -
91
SCHEDULE 8.1
Real Property Not Subject to Deed of Trust at Closing:
Pueblo, Colorado Plant Property, as more particularly described on the
following pages.
- 85 -
92
SCHEDULE 9.5
Litigation
1. Xxxxxxxxx x. Xxxxx Products Company, Charges Nos. 000 00 0000 (August
24, 1994) 000 00 0000; (September 5, 1994) U.S. Equal Employment
Opportunity Commission.
2. Xxxxxxxxx x. Xxxxx Products Company, Charge No. 340957159, U.S. Equal
Employment Opportunity Commission; Charge No. E 94-95 J-1105-00se,
California Department of Fair Employment & Housing.
3. Xxxxxxxx x. Xxxxx Products Company, Case No. 17-CB-4695, U.S. National
Labor Relations Board (May 5, 1995).
4. Bakery Confectionery & Tobacco Worker International Union Local 218 x.
Xxxxx Products Company, Case No. 17-CA- 18031, U.S. National Labor
Relations Board (May 11, 1995).
5. Xxxxxxxxx x. Xxxxx Products Company, Case No. CV 95 H 0525 S, U.S.
District Court, Northern District of Alabama (March 3, 1995).
6. Xxxxx x. Xxxxx Products Company, Charge No. ###-##-#### (August 9,
1994), U.S. Equal Employment Opportunity Commission.
7. Xxxxxx x. Xxxxx Products Company, Case Xx. XX-00-X-0000-X, X.X.
Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxxx of Alabama (June 7, 1995).
8. A disgruntled employee threatened to notify OSHA regarding dust levels
on the biscuit line of the Joplin plant. The Borrower's staff member
in charge of OSHA compliance states that dust levels were well within
regulatory standards. Nevertheless, the Borrower has modified certain
equipment in order to further reduce dust levels.
9. The Borrower normally has matters pending administratively as part of
its internal grievance procedures. Any of these matters may evolve
into a suit or action. At present, the Borrower is not aware of any
grievance proceedings that involve the threat of further action.
10. The Borrower has been threatened with litigation of two freight claims
in the bankruptcy of Industrial Freight, Inc. (BK No. LA 93-41245-ER),
and the unfiled bankruptcy of Xxxxxxxxx Truck Lines, Inc. These
claims are de minimisin the opinion of management of the Borrower.
11. Xxxxxxxxx x. Xxxxx Products Company. On August 18, 1995, the Borrower
received a notice from the Texas Commissioner on Human Rights that it
had "received a tendered document that constitutes an initial
complaint" before the Commission from Xxxxxx
- 86 -
93
Xxxxxxxxx, a former employee of the Borrower. The letter also states
that no further action will be taken until "a perfected complaint" is
served upon the Borrower. The Borrower is unaware of any facts that
may have given rise to Xx. Xxxxxxxxx'x complaint.
12. On August 28, 1995, the Borrower received notice from the National
Labor Relations Board, Region 27, that a petition for certification of
representatives had been filed in connection with the representation
of employees at the Pueblo, Colorado plant.
13. Xxxxx x. Xxxxx Products Company, et al, Case Xx. 00-0000, Xxxxx xx
Xxxxxx Xxxxx, Xxxxxxxxxx Xxxxxx, Xxxx (September 6, 1995).
14. Pursuant to a letter dated September 21, 1995, the Borrower was
notified that the Internal Revenue Service intends to conduct an audit
of the Muscatine, Iowa Union Employee Defined Benefit Plan. Such
audit has been scheduled for October 23, 1995.
- 87 -
94
SCHEDULE 9.6
Pension and Welfare Plans
A. Multi-Employer Plans contributed to by Borrower or a Subsidiary or
ERISA Affiliate:
1. Birmingham Multi-Employer Benefit Plan.
2. Joplin Union Multi-Employer Retirement Plan.
B. Welfare Plans which are self-funded by Borrower or a Subsidiary or
ERISA Affiliate and which have ongoing obligations for benefit
payments:
1. Xxxxx Products Company Group Benefits Plan, January 1, 1995.
2. Xxxxx Products Company Group Health Benefits Plan, Joplin
Union, February 10, 1995.
3. Xxxxx Products Company Birmingham Union Group Health Benefits
Plan.
4. The Joplin Collective Bargaining Agreement provides that if a
person has been employed for 20 years, has reached age 55 and
has a doctor's opinion that continued work will pose serious
health risk, then the Borrower will pay $200.00 per month
until the employee reaches age 62.
5. Salary Continuation Agreements listed on Schedule 9.20.
6. Executive Compensation Agreement, as amended, between the
Borrower and Xxx X. Xxxxxxxx (September 1, 1994) listed on
Schedule 9.20; Executive Compensation Agreement between the
Borrower and Xxxxxxx Xxxxxxxxx (September 1, 1992) listed on
Schedule 9.20 as amended on September 27, 1995.
- 88 -
95
SCHEDULE 9.7
Tax Returns and Payments
1. The Missouri Department of Revenue is currently conducting a sales and
use tax audit for the period of April 1, 1992 through March 31, 1995.
In connection with the audit, the Borrower has waived all statutes of
limitation pertaining to additional assessments of all state and local
taxes for a period of one year from April 20, 1995.
2. On May 31, 1995, the Comptroller of Public Accounts for the State of
Texas notified the Borrower that it intends to conduct a routine audit
of the Borrower's business activities in Texas covering a four-year
period.
3. The Ohio Department of Taxation has notified the Borrower that it
intends to conduct a sales and use tax audit for the period of
January, 1992 through June, 1995.
- 89 -
96
SCHEDULE 9.8
Subsidiaries
Borrower has no Subsidiaries.
- 90 -
97
SCHEDULE 9.10
Other Debt, Guarantees, Capitalized Leases and Operating Leases
1. Loan Agreement dated as of October 1, 1991 by and between County of
Pueblo, Colorado and Xxxxx Products Company.
2. Letter of Credit and Reimbursement Agreement dated as of December 19,
1995 by and between Xxxxx Products Company and Mercantile Bank of St.
Louis National Association.
3. Deed of Trust and Security Agreement dated as of December 19, 1995
from Xxxxx Products Company to the Public Trustee for Pueblo County,
State of Colorado for the benefit of Mercantile Bank of St. Louis
National Association.
4. Guaranty Agreement dated as of October 1, 1991 by and among Xxxxx
Products Company and Mercantile Bank of Joplin, N.A.
5. Lease Agreement dated June 24, 1993 between Borrower and Northeastern
Industrial Park, Inc. covering the Borrower's warehouse facility at
Guilderland Center, New York.
6. Letter of Credit dated October 28, 1994 in the amount of $500,000.00
issued by Mercantile Bank of St. Louis National Association in favor
of Liberty Mutual Insurance Company.
7. Letter of Credit dated October 28, 1994 in the amount of $617,206.00
issued by Mercantile Bank of St. Louis National Association in favor
of Liberty Mutual Insurance Company.
- 91 -
98
SCHEDULE 9.11
Unaccrued Wage, Insurance and Benefit Claims
1. See Schedule 9.5, items 1, 2, 3, 4, 5, 6, 8, 9, 11 and 13.
2. Payments to the Joplin Union Retirement Plan which are provided for in
the Joplin Collective Bargaining Agreement were not made for one month
in each of 1993 and 1994 due to the fact that the Borrower was
instructed by the Joplin Union Retirement Plan not to make such
payment because the plan was fully funded. The amount of each
withheld payment was approximately $25,000.00.
- 92 -
99
SCHEDULE 9.16
Patents, Trademarks and Copyrights
A. United States Patent and Trademark Office
1. PROMARK
Status: Cancelled - Section 8
Cancellation Date: January 22, 1991
(In Official Gazette) (No Section 8 Affidavit)
No. 1,286,282
International Class: 31 (Natural Agricultural Products)
Date Registered: July 17, 1984
Affidavits: None
Owner: Xxxxx Products Company
2. JAZZ FLO-SWEET and Design
Status: Registered
Registration No.: 683,376
International Class: 31 (Natural Agricultural Products)
Date Registered: August 11, 1959
Affidavits: No Information
Date Renewed: August 11, 1979
Owner: Xxxxx Products Company
3. RIP Stylized Letters
Status: Registered
Registration No.: 719,755
International Class: 31 (Natural Agricultural Products)
Date Registered: August 8, 1961
Affidavits: Section 8
Renewal Date: August 8, 1981
Owner: Xxxxx Products Company
4. BIG KICK and Design
Status: Expired
Registration No.: 949,033
International Class: 31 (Natural Agricultural Products)
Date Registered: December 19, 1972
Affidavits: Section 8, 15
Expiration Date: December 19, 1992
Owner: Xxxxx Products Company
- 93 -
100
5. FIELD & SHOW
Status: Registered
Registration No.: 939,988
International Class: 31 (Natural Agricultural Products)
Date Registered: August 1, 1972
Affidavits: Section 8, 15
Renewal Date: August 1, 1992
Owner: Xxxxx Products Company
6. TASTE-T-CHEW Stylized Letters
Status: Registered
Registration No.: 732,819
International Class: 31 (Natural Agricultural Products)
Date Registered: June 12, 1962
Affidavits: Section 8, 15
Renewal Date: June 12, 1982
Owner: Xxxxx Products Company
7. WINNER
Status: Registered
Registration No.: 900,890
International Class: 31 (Natural Agricultural Products)
Date Registered: October 13, 1970
Affidavits: Section 8, 15
Renewal Date: October 13, 1990
Owner: Xxxxx Products Company
8. JAZZ and Design
Status: Registered
Registration No: 656,188
International Class: 31 (Natural Agricultural Products)
Date Registered: December 24, 1957
Affidavits: No Information
Renewal Date: December 24, 1977
Owner: Xxxxx Products Company
9. KRISPY KRUMBLES
Status: Registered
Registration No.: 1,740,076
International Class: 31 (Natural Agricultural Products)
Date Registered: December 15, 1992
Affidavits: No Information (Affidavit Due December, 1998)
Owner: Xxxxx Products Company
- 94 -
101
B. The State of Alabama
1. TOWN & COUNTRY
Status: Registered
Registration No.: 101,291
International Class: 31 (Natural Agricultural Products)
Date Registered: January 25, 1982
Renewal Date: August 8, 1991
Owner: Xxxxx Products Company
2. STAMPEDE
Status: Registered
Registration No.: 101,012
International Class: 31 (Natural Agricultural Products)
Date Registered: February 26, 1981
Renewal Date: February 26, 1991
Owner: Xxxxx Products Company
- 95 -
102
SCHEDULE 9.17
Environmental and Health and Safety Matters
1. See Schedule 9.5, item 8.
2. The Borrower understands that underground storage tanks were removed
from the facilities at Birmingham, Alabama and Ocala, Florida.
Documentation of the removals is incomplete, and the Borrower
therefore warrants neither compliance with Environmental, Health and
Safety Laws governing removal of underground storage tanks, nor the
condition of the soil surrounding the sites of the tanks. Anecdotal
evidence suggests that the tank removed at Birmingham may have been
above ground.
3. In 1992, the Borrower exchanged parcels of land adjoining the site of
the Joplin, Missouri plant. Buildings on one of the parcels conveyed
by the Borrower may have contained asbestos insulation.
4. The Borrower's facilities at San Bernardino, California, Galena,
Kansas and a portion of the Joplin, Missouri facility that lies within
Kansas are located in Superfund Study Areas. The Borrower has
received no notice that it is or will be liable for any cleanup
responsibilities as a result of the classification of these sites.
5. Without prejudice to the statement in the next sentence, the odors
emitted in the course of the Borrower's operations potentially create
a condition that may subject the Borrower to liability under various
Health and Safety Laws governing air quality. The Borrower is
currently unaware of any unremediated written complaints from any
state, federal or other government authority relating to air quality.
6. The Borrower's steel fabricating facility in Joplin, Missouri is
located across the street to the east of the Xxxxxxx, Inc. CERCLIS
site, while its pet food manufacturing facility in Tracy, California
is located to the west and adjacent to a leaking underground storage
tank site that is a part of the former Mobil Bulk Distribution Plant.
The Borrower has received no notice nor is it currently aware of
material soil or groundwater impacts arising from these two offsite
areas.
- 96 -
103
SCHEDULE 9.18
Existing Investments
1. One Israeli Bond in an amount less than $2,000.00.
2. Borrower has entered into various commodity price swaps, commodity
price caps and commodity price collar and floor agreements, and
similar agreements or arrangements designed to protect against or
manage fluctuations in commodity prices with respect to agricultural
commodities bought and consumed in the ordinary course of business of
Borrower in amounts and on terms consistent with industry standard
practices for hedging such future commodity requirements of Borrower.
- 97 -
104
SCHEDULE 9.20
Existing Employment and Other Agreements
(A) Executive Compensation Agreements between Xxxxx Products Company and
the following:
1. Xxx X. Xxxxxxxx (September 1, 1994 (amended August 31, 1995)
2. Xxxxx X. Xxxx (June 1, 1994)
3. Xxxx X. Xxxxxxxx (June 1, 1994) (amended August 31, 1995)
4. Xxxx Xxxxx (June 1, 1994) (amended August 31, 1995)
5. Xxxxx X. Xxxxxxx (June 1, 1994) (amended August 31, 1995)
6. R. Xxxx Xxxx (June 1, 1994) (amended August 31, 1995)
7. Xxxxxxx Xxxxxxxxx (September 1, 1992) (amended September 27, 1995)
Salary Continuation Agreements between Xxxxx Products Company and the
following:
1. Xxx X. Xxxxxxxx (July 13, 1990)
2. Xxxx Xxxxxxxxx (July 13, 1990)
3. R. Xxxx Xxxx (July 13, 1990)
4. Xxxxx Xxxxxx (July 16, 1990)
5. Xxxx Xxxxxxx (September 28, 1990)
6. Xxxxx Xxxxxxx (October 4, 1990)
7. Xxxxx Xxxxx (July 16, 1990)
8. Xxxx Xxxxxxxx (July 16, 1990)
9. Xxxxxx Xxxxx (July 13, 1990)
10. Bob Fagundas (August 6, 1990)
11. Xxxx Xxxxx (July 24, 1990)
12. Xxxx Xxxxxxx (July 23, 1990)
13. Xxxx Xxxxxxxxxx (August 6, 1990)
14. Xxxxxx Xxxx (August 6, 1990)
15. Xxxx Xxxxx (July 25, 1990)
16. Xxx Xxxxxx (July 23, 1990)
17. Xxxx Xxxxxxxx (September 28, 1990)
18. Xxx Xxxx (September 28, 1990)
19. Xxxxx Xxxxxxx (July 13, 1990)
20. Xxxxx Xxxx (July 13, 1990)
21. Xxxxxxx Xxxxxx (July 13, 1990)
22. Xxxxxxx Xxxxxxxxxx (September 28, 1990)
23. Xxxxx Weak (July 25, 1990)
24. Xxxx Xxxxx (July 13, 1990)
25. Xxxxxxx Xxxxxxxxx (Xxxx 00, 0000)
- 00 -
000
(X) Collective Bargaining Agreements:
1. Agreement between United Food & Commercial Workers AFL-CIO &
CLC District Local Union 431 and Xxxxx Products Company,
Muscatine, Iowa (December 6, 1992 - December 2, 1995).
2. Collective Agreement between Xxxxx, Confectionery and Tobacco
Workers' International Union, Local No. 218, AFL-CIO and
Xxxxx Products Company (January 29, 1995 - January 30, 1999).
3. Agreement between United Wholesale and Warehouse Employees
Union, Local No. 261, affiliated with the Retail Wholesale and
Department Store Union AFL-CIO and Xxxxx Products Company,
Birmingham, Alabama (January 17, 1993 - January 18, 1997).
(C) 1. [Financial Advisory Agreement] dated ________________________,
1995, by and between Xxxxxxxxx, Xxxxxx & Xxxxxxxx and
Borrower.
2. [Financial Advisory Agreement] dated ________________________,
1995, by and between Summit/DPC Partners, L.P. and Borrower.
- 99 -
106
SCHEDULE 10.2(b)
Permitted Liens
1. See Schedule 9.10, Item 3.
2. Financing statement executed by Xxxxx Products Company, a Missouri
corporation, to Modern Leasing, Inc. of Iowa, filed September 14, 1993
with the California Secretary of State, No. 93187729;
- 100 -
107
EXHIBIT A
AMENDED AND RESTATED REVOLVING CREDIT NOTE
$_________________________ St. Louis, Missouri
February 28, 1996
FOR VALUE RECEIVED, on the last day of the Revolving Credit
Period, the undersigned, XXXXX PRODUCTS COMPANY, a Delaware corporation
("Borrower"), hereby promises to pay to the order of __________________
("Bank")the principal sum of ___________________ Dollars ($_________), or such
lesser sum as may then constitute the aggregate unpaid principal amount of all
Revolving Credit Loans made by Bank to Borrower pursuant to the Amended and
Restated Revolving Credit and Term Loan Agreement referred to below. The
aggregate principal amount of Revolving Credit Loans which Bank shall be
committed to have outstanding hereunder at any time shall not exceed _________
____________________________ Dollars ($_________), which amount may be borrowed,
paid, reborrowed and repaid, in whole or in part, subject to the terms and
conditions hereof and of the Amended and Restated Revolving Credit and Term Loan
Agreement referred to below. Borrower further promises to pay to the order of
Bank interest on the aggregate unpaid principal amount of such Revolving Credit
Loans on the dates and at the rate or rates provided for in the Amended and
Restated Revolving Credit and Term Loan Agreement. The amount of interest
accruing hereunder shall be computed on an actual day, 360-day year basis. All
such payments of principal and interest shall be made in lawful currency of the
United States in Federal or other immediately available funds at the office of
Mercantile Bank of St. Louis National Association (the "Agent"), 000 Xxxxxx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000.
All Revolving Credit Loans made by Bank and all repayments of
the principal thereof shall be recorded by Bank and, prior to any transfer
hereof, endorsed by Bank on the schedule attached hereto, or on a continuation
of such schedule attached to and made a part hereof; provided, however, that
the obligation of Borrower to repay each Revolving Credit Loan made hereunder
shall be absolute and unconditional, notwithstanding any failure of Bank to
record or endorse or any mistake by Bank in connection with recordation or
endorsement on the schedules attached to this Note. Bank's books and records
(including, without limitation, the schedules attached to this Note) showing
the account between Bank and Borrower shall be admissible in evidence in any
action or proceeding and shall constitute prima facie proof of the items
therein set forth.
This Note is one of the Revolving Credit Notes referred to in
the Amended and Restated Revolving Credit and Term Loan Agreement dated the
date hereof by and among Borrower, Agent and the banks listed on the signature
pages thereof (as the same may from time to time be amended, modified, extended
or renewed, the "Credit Agreement"). The Credit Agreement, among other things,
contains provisions for acceleration of the maturity hereof upon the occurrence
of certain stated events and also for prepayments on account of principal
hereof and interest hereon prior to the maturity hereof upon the terms and
conditions specified therein.
- 101 -
108
All capitalized terms used and not otherwise defined in this Note shall have
the respective meanings ascribed to them in the Credit Agreement.
This Note is secured by those certain Deeds of Trust (as
defined in the Credit Agreement) dated as of October 5, 1995 and as amended on
the date hereof, executed by Borrower in favor of Agent for the benefit of Bank
and others (as the same may from time to time be amended, the "Deeds of
Trust"), to which Deeds of Trust reference is hereby made for a description of
the security and a statement of the terms and conditions upon which this Note
is secured.
This Note is further secured by that certain Security
Agreement dated as of October 5, 1995 and as amended on the date hereof,
executed by Borrower in favor of Agent for the benefit of Bank and others (as
the same may from time to time be amended, the "Security Agreement"), to which
Security Agreement reference is hereby made for a description of the security
and a statement of the terms and conditions upon which this Note is further
secured.
This Note is further secured by that certain General Pledge
and Security Agreement dated as of October 5, 1995 and as amended on the date
hereof, executed by DPC Acquisition Corp. in favor of Agent for the benefit of
Bank and others (as the same may from time to time be amended, the "Pledge
Agreement"), to which Pledge Agreement reference is hereby made for a
description of the security and a statement of the terms and conditions upon
which this Note is further secured.
This Note is further secured by that certain Collateral
Assignment dated as of October 5, 1995 and as amended on the date hereof,
executed by Borrower in favor of Agent for the benefit of Bank and others (as
the same may from time to time be amended, the "Collateral Assignment"), to
which Collateral Assignment reference is hereby made for a description of the
security and a statement of the terms and conditions upon which this Note is
further secured.
Upon the occurrence of any Event of Default under the Credit
Agreement, the Security Agreement, the Pledge Agreement, the Collateral
Assignment or any of the Deeds of Trust, Bank's obligation to make additional
Revolving Credit Loans under this Note may be terminated in the manner and with
the effect as provided in the Credit Agreement and the entire outstanding
principal balance of this Note and all accrued and unpaid interest thereon may
be declared to be immediately due and payable in the manner and with the effect
as provided in the Credit Agreement.
In the event that any payment due hereunder shall not be paid
when due, whether by reason of acceleration or otherwise, and this Note shall
be placed in the hands of an attorney or attorneys for collection, or if
foreclosure of the Security Agreement, the Pledge Agreement, the Collateral
Assignment or under any of the Deeds of Trust is under taken by the Agent or
Bank, or if this Note shall be placed in the hands of an attorney or attorneys
for representation of Bank in connection with bankruptcy or insolvency
proceedings relating hereto, Borrower hereby agrees to pay to the order of
Bank, in addition to all other amounts otherwise due hereon,
- 102 -
109
the reasonable costs and expenses of such collection, foreclosure and
representation, including, without limitation, reasonable attorneys' fees and
expenses incurred by Agent or Bank (whether or not litigation shall be
commenced in aid thereof). Borrower hereby waives presentment for payment,
demand, protest, notice of protest and notice of dishonor.
This Note shall be governed by and construed in accordance
with the substantive laws of the State of Missouri (without reference to
conflict of law principles).
XXXXX PRODUCTS COMPANY
By:
--------------------------------------
Title:
-----------------------------------
- 103 -
110
Amended and Restated Revolving Credit Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
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Amount Amount of Unpaid
Base Rate or of Principal Principal Notation
Date LIBOR Loan Loan Repaid Balance Made By
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- 104 -
111
EXHIBIT B
AMENDED AND RESTATED SWING LINE NOTE
$4,000,000.00 St. Louis, Missouri
February 28, 1996
FOR VALUE RECEIVED, on the last day of the Revolving Credit
Period, the undersigned, XXXXX PRODUCTS COMPANY, a Delaware corporation
("Borrower"), hereby promises to pay to the order of MERCANTILE BANK OF ST.
LOUIS NATIONAL ASSOCIATION ("Bank"), the principal sum of Four Million Dollars
($4,000,000.00), or such lesser sum as may then constitute the aggregate unpaid
principal amount of all Swing Loans made by Bank to Borrower pursuant to the
Amended and Restated Revolving Credit and Term Loan Agreement referred to
below. The aggregate principal amount of Swing Loans which Bank shall be
committed to have outstanding hereunder at any time shall not exceed the lesser
of (i) Four Million Dollars ($4,000,000.00), or (ii) the difference between the
Revolving Credit Commitments of all of the Banks (as defined in the Amended and
Restated Revolving Credit and Term Loan Agreement) and the amount of the
Revolving Credit Loans, Letter of Credit Loans and the undrawn face amount of
Letters of Credit then outstanding hereunder at the time of computation, which
amount may be borrowed, paid, reborrowed and repaid, in whole or in part,
subject to the terms and conditions hereof and of the Amended and Restated
Revolving Credit and Term Loan Agreement referred to below. Borrower further
promises to pay to the order of Bank interest on the aggregate unpaid principal
amount of such Swing Loans on the dates and at the rate provided for in the
Amended and Restated Revolving Credit and Term Loan Agreement. The amount of
interest accruing hereunder shall be computed on an actual day, 360-day year
basis. All such payments of principal and interest shall be made in lawful
currency of the United States in Federal or other immediately available funds
at the office of Mercantile Bank of St. Louis National Association (the
"Agent"), 000 Xxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000.
All Swing Loans made by Bank and all repayments of the
principal thereof shall be recorded by Bank and, prior to any transfer hereof,
endorsed by Bank on the schedule attached hereto, or on a continuation of such
schedule attached to and made a part hereof; provided, however, that the
obligation of Borrower to repay each Swing Loan made hereunder shall be
absolute and unconditional, notwithstanding any failure of Bank to record or
endorse or any mistake by Bank in connection with recordation or endorsement on
the schedules attached to this Note. Bank's books and records (including,
without limitation, the schedules attached to this Note) showing the account
between Bank and Borrower shall be admissible in evidence in any action or
proceeding and shall constitute prima facie proof of the items therein set
forth.
This Note is the Swing Line Note referred to in the Amended
and Restated Revolving Credit and Term Loan Agreement dated the date hereof by
and among Borrower, Agent and the banks listed on the signature pages thereof
(as the same may from time to time be amended, modified, extended or renewed,
the "Credit Agreement"). The Credit Agreement, among other things, contains
provisions for acceleration of the maturity hereof upon the
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occurrence of certain stated events and also for prepayments on account of
principal hereof and interest hereon prior to the maturity hereof upon the
terms and conditions specified therein. All capitalized terms used and not
otherwise defined in this Note shall have the respective meanings ascribed to
them in the Credit Agreement.
This Note is secured by those certain Deeds of Trust (as
defined in the Credit Agreement) dated as of October 5, 1995 and as amended on
the date hereof, executed by Borrower in favor of Agent for the benefit of Bank
and others (as the same may from time to time be amended, the "Deeds of
Trust"), to which Deeds of Trust reference is hereby made for a description of
the security and a statement of the terms and conditions upon which this Note
is secured.
This Note is further secured by that certain Security
Agreement dated as of October 5, 1995 and as amended on the date hereof,
executed by Borrower in favor of Agent for the benefit of Bank and others (as
the same may from time to time be amended, the "Security Agreement"), to which
Security Agreement reference is hereby made for a description of the security
and a statement of the terms and conditions upon which this Note is further
secured.
This Note is further secured by that certain General Pledge
and Security Agreement dated as of October 5, 1995 and as amended on the date
hereof, executed by DPC Acquisition Corp. in favor of Agent for the benefit of
Bank and others (as the same may from time to time be amended, the "Pledge
Agreement"), to which Pledge Agreement reference is hereby made for a
description of the security and a statement of the terms and conditions upon
which this Note is further secured.
This Note is further secured by that certain Collateral
Assignment dated as of October 5, 1995 and as amended on the date hereof,
executed by Borrower in favor of Agent for the benefit of Bank and others (as
the same may from time to time be amended, the "Collateral Assignment"), to
which Collateral Assignment reference is hereby made for a description of the
security and a statement of the terms and conditions upon which this Note is
further secured.
Upon the occurrence of any Event of Default under the Credit
Agreement, the Security Agreement, the Pledge Agreement, the Collateral
Assignment or any of the Deeds of Trust, Bank's obligation to make additional
Swing Loans under this Note may be terminated in the manner and with the effect
as provided in the Credit Agreement and the entire outstanding principal
balance of this Note and all accrued and unpaid interest thereon may be
declared to be immediately due and payable in the manner and with the effect as
provided in the Credit Agreement.
In the event that any payment due hereunder shall not be paid
when due, whether by reason of acceleration or otherwise, and this Note shall
be placed in the hands of an attorney or attorneys for collection, or if
foreclosure of the Security Agreement, the Pledge Agreement, the Collateral
Assignment or under any of the Deeds of Trust is under taken by the Agent or
Bank, or if this Note shall be placed in the hands of an attorney or attorneys
for representation
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of Bank in connection with bankruptcy or insolvency proceedings relating
hereto, Borrower hereby agrees to pay to the order of Bank, in addition to all
other amounts otherwise due hereon, the reasonable costs and expenses of such
collection, foreclosure and representation, including, without limitation,
reasonable attorneys' fees and expenses incurred by Agent or Bank (whether or
not litigation shall be commenced in aid thereof). Borrower hereby waives
presentment for payment, demand, protest, notice of protest and notice of
dishonor.
This Note shall be governed by and construed in accordance
with the substantive laws of the State of Missouri (without reference to
conflict of law principles).
XXXXX PRODUCTS COMPANY
By:
----------------------------------
Title:
---------------------------------
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Amended and Restated Swing Line Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
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Date Loan Repaid Balance Made By
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EXHIBIT C
AMENDED AND RESTATED TERM LOAN PROMISSORY NOTE
$___________________ St. Louis, Missouri
February 28, 1996
FOR VALUE RECEIVED, the undersigned, XXXXX PRODUCTS COMPANY, a
Delaware corporation ("Borrower"), hereby promises to pay to the order of
__________________________________________, a _______________________________
________ ("Bank"), the principal sum of ____________________________ Dollars
($_______________________) in seventeen (17) consecutive quarterly principal
installments payable on the last day of each March, June, September and
December prior to maturity, as follows: two (2) equal consecutive quarterly
principal installments in the amount of _____________________________________
Dollars ($__________________) each, due and payable commencing September 30,
1996, followed by four (4) equal consecutive quarterly principal installments
in the amount of ______________________________________________________ Dollars
($__________________) each, due and payable commencing March 31, 1997, followed
by eight (8) equal consecutive quarterly principal installments in the amount of
____________________________________________________________________ Dollars
($__________________) each, due and payable commencing March 31, 1998, followed
by two (2) equal consecutive quarterly principal installments in the amount of
_____________________________________________________________ Dollars
($__________________) each, due and payable commencing March 31, 2000, with the
seventeenth (17th) and final installment in the amount of the then outstanding
principal balance hereunder due and payable on September 30, 2000. Borrower
further promises to pay to the order of Bank interest on the aggregate unpaid
principal amount of such Term Loan on the dates and at the rate or rates
provided for in the Credit Agreement (herein defined). The amount of interest
accruing hereunder shall be computed on an actual day, 360-day year basis. All
such payments of principal and interest shall be made in lawful currency of the
United States in Federal or other immediately available funds at the office of
Mercantile Bank of St. Louis National Association, as agent for Bank (the
"Agent"), located at 000 Xxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000.
This Note is one of the Term Notes described in that certain
Amended and Restated Revolving Credit and Term Credit Agreement dated the date
hereof by and between Borrower, Agent and the Banks named therein (as the same
may from time to time be amended, modified, extended or renewed, the "Credit
Agreement"). The Credit Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the occurrence of certain stated
events and also for annual mandatory prepayments from Borrower's Excess Cash
Flow (as defined in the Credit Agreement) on the dates and in the amounts set
forth in Section 5.3 therein and voluntary prepayments on account of principal
hereof and interest hereon prior to the maturity hereof upon the terms and
conditions specified therein. Any principal amounts prepaid hereunder shall be
applied, ratably, to the installments remaining installments of principal
(including any balloon payment at maturity) due hereunder, and any such
principal amount prepaid may not thereafter be reborrowed. All capitalized
terms used and not otherwise defined in this Note shall have the respective
meanings ascribed to them in the Credit Agreement.
- 109 -
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This Note is secured by those certain Deeds of Trust (as
defined in the Credit Agreement) dated as of October 5, 1995 and as amended on
the date hereof, executed by Borrower in favor of Agent for the benefit of Bank
and others (as the same may from time to time be amended, the "Deeds of
Trust"), to which Deeds of Trust reference is hereby made for a description of
the security and a statement of the terms and conditions upon which this Note
is secured.
This Note is further secured by that certain Security
Agreement dated as of October 5, 1995 and as amended on the date hereof,
executed by Borrower in favor of Agent for the benefit of Bank and others (as
the same may from time to time be amended, the "Security Agreement"), to which
Security Agreement reference is hereby made for a description of the security
and a statement of the terms and conditions upon which this Note is further
secured.
This Note is further secured by that certain General Pledge
and Security Agreement dated as of October 5, 1995 and as amended on the date
hereof, executed by DPC Acquisition Corp. in favor of Agent for the benefit of
Bank and others (as the same may from time to time be amended, the "Pledge
Agreement"), to which Pledge Agreement reference is hereby made for a
description of the security and a statement of the terms and conditions upon
which this Note is further secured.
This Note is further secured by that certain Collateral
Assignment dated as of October 5, 1995 and as amended on the date hereof,
executed by Borrower in favor of Agent for the benefit of Bank and others (as
the same may from time to time be amended, the "Collateral Assignment"), to
which Collateral Assignment reference is hereby made for a description of the
security and a statement of the terms and conditions upon which this Note is
further secured.
Upon the occurrence of any Event of Default under the Credit
Agreement, the Security Agreement, the Pledge Agreement, the Collateral
Assignment or any of the Deeds of Trust, the entire outstanding principal
balance of this Note and all accrued and unpaid interest thereon may be
declared to be immediately due and payable in the manner and with the effect as
provided in the Credit Agreement.
In the event that any payment due hereunder shall not be paid
when due, whether by reason of acceleration or otherwise, and this Note shall
be placed in the hands of an attorney or attorneys for collection, or if
foreclosure of the Security Agreement, the Pledge Agreement, the Collateral
Assignment or under any of the Deeds of Trust is under taken by the Agent or
Bank, or if this Note shall be placed in the hands of an attorney or attorneys
for representation of Bank in connection with bankruptcy or insolvency
proceedings relating hereto, Borrower hereby agrees to pay to the order of
Bank, in addition to all other amounts otherwise due hereon, the reasonable
costs and expenses of such collection, foreclosure and representation,
including, without limitation, reasonable attorneys' fees and expenses incurred
by Agent or Bank (whether or not litigation shall be commenced in aid thereof).
Borrower hereby waives presentment for payment, demand, protest, notice of
protest and notice of dishonor.
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117
This Note shall be governed by and construed in accordance
with the substantive laws of the State of Missouri (without reference to
conflict of law principles).
XXXXX PRODUCTS COMPANY
By:
----------------------------------
Title:
---------------------------------
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118
EXHIBIT D
LETTER OF CREDIT REQUEST
[Borrower's Letterhead]
[Date]
Mercantile Bank of St. Louis
National Association
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Mid-America Group
Re: Amended and Restated Revolving Credit and Term Loan Agreement
Dated February 28, 1996 (as from time to time amended,
modified, extended or renewed, the "Agreement")
Gentlemen:
Pursuant to Section 4.1 of the Agreement, the undersigned hereby
requests that you issue (pick one):
_____ an irrevocable standby Letter of Credit in the amount of
$___________________ for the account of the undersigned and for the
benefit of _________________________________ upon the terms and
conditions set forth in the attached Application and Agreement for
Irrevocable Standby Letter of Credit.
_____ a commercial Letter of Credit in the amount of $___________________
for the account of the undersigned and for the benefit of
_________________________________ upon the terms and conditions set
forth in the attached Application and Agreement for Commercial Letter
of Credit.
The undersigned hereby represents and warrants to you that as of the
date hereof all of the representations and warranties of the undersigned
contained in the Agreement are true and correct in all material respects as if
made on and as of the date hereof and no Default or Event of Default (as
defined in the Agreement) has occurred and is continuing and that no such
Default or Event of Default will result from the issuance of the Letter of
Credit requested hereby.
Very truly yours,
XXXXX PRODUCTS COMPANY
By:
---------------------------------------
Title:
------------------------------------
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119
EXHIBIT E
FORM OF STANDBY LETTER OF CREDIT APPLICATION
- 113 -
120
EXHIBIT F
FORM OF COMMERCIAL LETTER OF CREDIT APPLICATION
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121
EXHIBIT G
LETTER OF CREDIT PARTICIPATION CERTIFICATE
This Letter of Credit Participation Certificate is issued
pursuant to Section 4.2 of that certain Amended and Restated Revolving Credit
and Term Loan Agreement dated February 28, 1996, by and among Xxxxx Products
Company (formerly known as DPC Transition Corp), the banks listed on the
signature pages thereof and Mercantile Bank of St. Louis National Association,
as agent for the Banks, as the same may from time to time be amended, modified,
extended or renewed (the "Credit Agreement"). All capitalized terms used and
not otherwise defined herein shall have the respective meanings ascribed to
them in the Credit Agreement.
Subject to the terms, provisions and conditions contained in
the Credit Agreement, Mercantile hereby issues to
______________________________ a ______________________ Percent (________%)
undivided participation interest in all Letters of Credit issued by Mercantile
from time to time under the Credit Agreement (including, without limitation, an
undivided participation interest in the reimbursement risk relating to such
Letters of Credit and in all payments and Letter of Credit Loans made by
Mercantile in connection with such Letters of Credit).
This Certificate may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were on the same instrument.
Executed this ______ day of ____________, 19_____.
MERCANTILE BANK OF ST. LOUIS
NATIONAL ASSOCIATION
By:
-----------------------------------
Title:
----------------------------------
The foregoing Letter of Credit Participation Certificate is
hereby accepted this ______ day of _________ __, 19_____.
----------------------------------------
By:
-----------------------------------
Title:
----------------------------------
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122
EXHIBIT H
FORM OF LEGAL OPINION
- 116 -
123
EXHIBIT I
______________________________, 19__
Mercantile Bank of St. Louis
National Association, as Agent
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Mid-America Group
Gentlemen:
Reference is hereby made to that certain Amended and Restated
Revolving Credit and Term Loan Agreement dated February 28, 1996, by and among
the undersigned, the Banks listed therein and you as agent for the Banks (as
from time to time amended, modified, extended or renewed, the "Agreement").
All capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed to them in the Agreement.
The undersigned hereby certifies to the Agent and each of the
Banks that as of the date hereof:
(a) all of the representations and warranties set forth
in Section 6 of the Agreement, as subsequently updated in writing to the Agent
pursuant to Section 10.1(k) or otherwise, are true and correct in all material
respects as if made on and as of the date hereof;
(b) no violation or breach of any of the affirmative
covenants set forth in Sections 4.3, 10.1 or 10.3 of the Agreement has occurred
and is continuing;
(c) no violation or breach of any of the negative
covenants set forth in Sections 10.2 or 10.3 of the Agreement has occurred and
is continuing;
(d) no Default or Event of Default under or within the
meaning of the Agreement has occurred and is continuing;
(e) the financial statements of Borrower and its
Consolidated Subsidiaries delivered to you with this letter are true, correct
and complete and have been prepared in accordance with GAAP consistently
applied and present fairly the financial information of Borrower; and
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124
(f) the financial covenant information set forth in
Schedule 1 to this letter is true and correct for Borrower and its Consolidated
Subsidiaries (excluding its Unrestricted Subsidiaries, if any).
Very truly yours,
XXXXX PRODUCTS COMPANY
By:
----------------------------------------
Title:
---------------------------------------
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125
SCHEDULE 1
Financial Covenant Information
as of , 19
Financial Covenant Actual Required
------------------ ------ --------
- 119 -
126
EXHIBIT J
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _____________, 19___ among [ASSIGNOR]
(the "Assignor"), [ASSIGNEE] (the "Assignee"), XXXXX PRODUCTS COMPANY, formerly
known as DPC Transition Corp. (the "Borrower"), and MERCANTILE BANK OF ST.
LOUIS NATIONAL ASSOCIATION, as Agent (the "Agent").
WITNESSETH:
WHEREAS, this Assignment and Assumption Agreement (this
"Agreement") relates to the Amended and Restated Revolving Credit and Term Loan
Agreement dated as of February 28, 1996 among the Borrower, the Assignor and
the other Banks party thereto, as Banks, and the Agent (the "Credit
Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor
has a Revolving Credit Commitment to make Revolving Credit Loans to the
Borrower, in an aggregate principal amount at any time outstanding not to
exceed $____________ (the "Revolving Credit Commitment"), and a Term Loan
Commitment to make a Term Loan to the Borrower, in an aggregate principal
amount of $_____________ (the "Term Loan Commitment");
WHEREAS, Revolving Credit Loans made to the Borrower by the
Assignor under the Credit Agreement in the aggregate principal amount of
$______________ are outstanding as of the date hereof, and the Term Loan made
to the Borrower by the Assignor under the Credit Agreement is in the present
outstanding principal amount of $______________ as of the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all
of the rights of the Assignor under the Credit Agreement in respect of a
____________________ percent (_____%) portion of both its Revolving Credit
Commitment in the amount of $___________________ and of its Term Loan
Commitment in the amount of $______________ (the "Assigned Commitments"),
together with a corresponding portion of its outstanding Revolving Credit Loans
and Term Loan and its interest in all Collateral and Guarantees therefor, and
the Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.
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127
SECTION 2. Assignment. The Assignor hereby assigns and
sells to the Assignee all of the rights of the Assignor under the Credit
Agreement to the extent of the Assigned Commitments, and the Assignee hereby
accepts such assignment from the Assignor and assumes all of the obligations of
the Assignor under the Credit Agreement to the extent of the Assigned
Commitments, including the purchase from the Assignor of the corresponding
portion of the principal amount of the Revolving Credit Loans and Term Loans
made by the Assignor outstanding at the date hereof. Upon the execution and
delivery hereof by the Assignor, the Assignee, the Borrower and the Agent and
the payment of the amounts specified in Section 3 required to be paid on the
date hereof (i) the Assignee shall, as of the date hereof, succeed to the
rights and be obligated to perform the obligations of a Bank under the Credit
Agreement with a Revolving Credit Commitment of $___________________ and a Term
Loan Commitment of $_________________, and (ii) the Revolving Credit Commitment
and the Term Loan Commitment of the Assignor shall, as of the date hereof, each
be reduced by a like amount and the Assignor released from its obligations
under the Credit Agreement to the extent such obligations have been assumed by
the Assignee. The assignment provided for herein shall be without recourse to
the Assignor.
SECTION 3. Payments. As consideration for the
assignment and sale contemplated in Section 2 hereof, the Assignee shall pay to
the Assignor on the date hereof in Federal funds the amount heretofore agreed
between them.1 It is understood that commitment and/or facility fees accrued to
the date hereof with respect to the Assigned Commitments, are for the account
of the Assignor and such fees accruing from and including the date hereof are
for the account of the Assignee. Each of the Assignor and the Assignee hereby
agrees that if it receives any amount under the Credit Agreement which is for
the account of the other party hereto, it shall receive the same for the
account of such other party to the extent of such other party's interest
therein and shall promptly pay the same to such other party.
SECTION 4. Consent of the Borrower and the Agent. This
Agreement is conditioned upon the consent of the Borrower and the Agent
pursuant to Section 13.15 of the Credit Agreement. The execution of this
Agreement by the Borrower and the Agent is evidence of this consent. Pursuant
to Section 13.15 the Borrower agrees to execute and deliver a Note payable to
the order of the Assignee to evidence the assignment and assumption provided
for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes
no representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition, or
statements of the Borrower or the Guarantor, or the validity and enforceability
of the obligations of the Borrower or Guarantor in respect of the Credit
Agreement or any Note. The Assignee acknowledges that it has, independently
and without
____________________
1 Amount should combine principal together with accrued interest and
breakage compensation, if any, to be paid by the assignee, net of any
portion of any upfront fee to be paid by the Assignor to the Assignee.
It may be preferable in an appropriate case to specify these amounts
generically or by formula rather than as a fixed sum.
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128
reliance on the Assignor, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement and will continue to be responsible for making its own
independent appraisal of the business, affairs and financial condition of the
Borrower.
SECTION 6. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of Missouri.
SECTION 7. Counterparts. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date
first above written.
[ASSIGNOR]
By:
--------------------------------------
Title:
-----------------------------------
[ASSIGNEE]
By:
--------------------------------------
Title:
------------------------------------
XXXXX PRODUCTS COMPANY
By:
--------------------------------------
Title:
------------------------------------
MERCANTILE BANK OF ST. LOUIS
NATIONAL ASSOCIATION, as Agent
By:
--------------------------------------
Title:
-------------------------------------
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