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EXHIBIT 10.6
AMENDED AND RESTATED CREDIT AGREEMENT
by and between
ALLIED CAPITAL CORPORATION II
as Borrower
and
NATIONSBANK, N.A.
as Bank
Dated September 28, 1995
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS; ACCOUNTING TERMS; AMENDMENTS . . . . . . . . . . . . . . . . . . . -1-
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
Section 1.02 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-
ARTICLE II THE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
Part A. The Revolving Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
Section 2.01 Amount of the Revolving Loan . . . . . . . . . . . . . . . . . . . . . . . . . -11-
Section 2.02 Advances; Revolving Period . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
Section 2.03 Interest on the Revolving Loan . . . . . . . . . . . . . . . . . . . . . . . . -11-
Section 2.04 Repayment of the Revolving Loan; The Revolving Note . . . . . . . . . . . . . . -11-
Section 2.05 Reduction of Maximum Revolving Loan Amount; Conversion of Revolving
Loan to a Term Loan or Term Loans . . . . . . . . . . . . . . . . . . . . . . . -12-
Section 2.06 Purpose of the Revolving Loan . . . . . . . . . . . . . . . . . . . . . . . . . -12-
Section 2.07 Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
Part B. The Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
Section 2.08 Aggregate Amount of the Term Loans . . . . . . . . . . . . . . . . . . . . . . -12-
Section 2.09 Interest on the Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
Section 2.10 Repayment of the Term Loans; The Term Notes . . . . . . . . . . . . . . . . . . -13-
Section 2.11 Purpose of Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
Part C. Terms Applicable to All Loans . . . . . . . . . . . . . . . . . . . . . . . . . -13-
Section 2.12 EuroDollar Deposits Unavailable or Libor Rate Unascertainable . . . . . . . . . -13-
Section 2.13 Interest Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
Section 2.14 Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
Section 2.15 Fixed Rate Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
Section 2.16 Late Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
Section 2.17 Default Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
Section 2.18 Event of Default or Possible Default . . . . . . . . . . . . . . . . . . . . . -16-
ARTICLE III SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
Section 3.01 Collateral Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
Section 3.02 Debt Secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
Section 3.03 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
Section 3.04 Collateral Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
Section 3.05 Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -18-
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Section 3.06 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -19-
Section 3.07 Inconsistent Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . -19-
Section 3.08 Collateral Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . -19-
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BORROWER . . . . . . . . . . . . . . . . -19-
Section 4.01 Organization of the Borrower; Business and Property . . . . . . . . . . . . . . -19-
Section 4.02 Authorization; Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . -20-
Section 4.03 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -20-
Section 4.04 Projections and Financial Statements . . . . . . . . . . . . . . . . . . . . . -20-
Section 4.05 Financial Condition at Date of Credit Agreement . . . . . . . . . . . . . . . . -21-
Section 4.06 No Adverse Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
Section 4.07 Title to Properties; Patents, Trademarks, Etc. . . . . . . . . . . . . . . . . -21-
Section 4.08 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
Section 4.09 Compliance with Other Instruments . . . . . . . . . . . . . . . . . . . . . . . -22-
Section 4.10 Material Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
Section 4.11 Correctness of Data Furnished . . . . . . . . . . . . . . . . . . . . . . . . . -22-
Section 4.12 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
Section 4.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23-
Section 4.14 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -24-
Section 4.15 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -24-
Section 4.16 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -25-
Section 4.17 Regulation U, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -25-
Section 4.18 Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -25-
Section 4.19 Securities Act, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -25-
Section 4.20 Name Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -26-
Section 4.21 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -26-
Section 4.22 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -26-
Section 4.23 Principal Place of Business . . . . . . . . . . . . . . . . . . . . . . . . . . -26-
Section 4.24 Brokers, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -26-
Section 4.25 Employee Controversies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -26-
ARTICLE V CONDITIONS TO BORROWING . . . . . . . . . . . . . . . . . . . . . . . . . . . . -26-
Part I Conditions Precedent Agreement . . . . . . . . . . . . . . . . . . . . . . . . -26-
Section 5.01 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . -27-
Section 5.02 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -27-
Section 5.03 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -27-
Section 5.04 Insurance Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -27-
Section 5.05 Notes, Collateral Lists and Collateral Security Documents . . . . . . . . . . . -27-
Section 5.06 Disbursement Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . -27-
Section 5.07 Opinion of Counsel for the Borrower . . . . . . . . . . . . . . . . . . . . . . -27-
Section 5.08 Corporate Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -27-
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Section 5.09 Payment of Fees; Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . -28-
Section 5.10 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -28-
Section 5.11 Borrower's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . -28-
Section 5.12 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -28-
Section 5.13 Landlord's Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -29-
Section 5.14 Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -29-
Part II Conditions Precedent to Subsequent Advances or Conversions . . . . . . . . . . -29-
Section 5.15 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -29-
Section 5.16 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -29-
Section 5.17 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . -29-
Section 5.18 Borrower's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . -29-
ARTICLE VI AFFIRMATIVE COVENANTS OF THE BORROWER . . . . . . . . . . . . . . . . . . . . . -30-
Section 6.01 Payment of Amounts Due . . . . . . . . . . . . . . . . . . . . . . . . . . . . -30-
Section 6.02 Existence, Business, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . -30-
Section 6.03 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . -30-
Section 6.04 Payment of Taxes, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -30-
Section 6.05 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -31-
Section 6.06 Accounts and Reports of the Borrower . . . . . . . . . . . . . . . . . . . . . -31-
Section 6.07 Information and Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . -34-
Section 6.08 Notice of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -34-
Section 6.09 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -34-
Section 6.10 Unconsolidated Ratio of Total Liabilities to Tangible Net Worth . . . . . . . . -34-
Section 6.11 Consolidated Ratio of Total Liabilities to Tangible Net Worth . . . . . . . . . -35-
Section 6.12 Unconsolidated Ratio of Performing Investments to Total Debt . . . . . . . . . -35-
Section 6.13 Unconsolidated Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . -35-
Section 6.14 Consolidated Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . -35-
Section 6.15 Deposit Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -35-
Section 6.16 Post-Closing Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -36-
Section 6.17 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -36-
Section 6.18 On-Site Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -36-
Section 6.19 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -36-
ARTICLE VII NEGATIVE COVENANTS OF THE BORROWER . . . . . . . . . . . . . . . . . . . . . . -36-
Section 7.01 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -36-
Section 7.02 Limitation of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . -37-
Section 7.03 Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -39-
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Section 7.04 Management; Investment Advisory Agreement . . . . . . . . . . . . . . . . . . . -39-
Section 7.05 Assignment or Sale of Accounts or Notes Receivable . . . . . . . . . . . . . . -39-
Section 7.06 Liquidation, Merger, or Consolidation . . . . . . . . . . . . . . . . . . . . . -40-
Section 7.07 Amendment of Certificate of Incorporation and/or By-Laws . . . . . . . . . . . -40-
Section 7.08 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -40-
Section 7.09 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -40-
Section 7.10 Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -40-
Section 7.11 Environmental Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . -41-
Section 7.12 Transaction with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . -41-
ARTICLE VIII WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -42-
ARTICLE IX DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -42-
Section 9.01 Principal Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -42-
Section 9.02 Interest Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -42-
Section 9.03 Other Payment Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . -42-
Section 9.04 Other Provision Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . -42-
Section 9.05 Representation and Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . -42-
Section 9.06 Collateral Security Document or Other Loan Document Default . . . . . . . . . . -43-
Section 9.07 Collateral Security Document Representation and Warranty . . . . . . . . . . . -43-
Section 9.08 Financial Difficulties . . . . . . . . . . . . . . . . . . . . . . . . . . . . -43-
Section 9.09 Permit and Real Estate Default . . . . . . . . . . . . . . . . . . . . . . . . -44-
Section 9.10 Cross-Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -44-
Section 9.11 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -44-
Section 9.12 Restraint on Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -45-
ARTICLE X REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -45-
Section 10.01 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -45-
Section 10.02 Recovery of Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -45-
Section 10.03 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -46-
Section 10.04 Cost of Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -46-
Section 10.05 No Advances; Conversions, etc. . . . . . . . . . . . . . . . . . . . . . . . . -46-
ARTICLE XI MANAGEMENT AND COLLECTION OF COLLATERAL . . . . . . . . . . . . . . . . . . . . -46-
Section 11.01 Status of Investments and Other Collateral . . . . . . . . . . . . . . . . . . -46-
Section 11.02 Collection of Receivables, Investments; Management of Collateral . . . . . . . -47-
Section 11.03 Upon Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -48-
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ARTICLE XII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -50-
Section 12.01 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -50-
Section 12.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -51-
Section 12.03 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . -52-
Section 12.04 Entire Agreement; Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . -52-
Section 12.05 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -52-
Section 12.06 Binding Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -52-
Section 12.07 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . -53-
Section 12.08 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -53-
Section 12.09 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -53-
Section 12.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -54-
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Credit Agreement"),
dated as of the 28th day of September, 1995, is made by and between ALLIED
CAPITAL CORPORATION II, a Maryland corporation, and NATIONSBANK, N.A., a
national banking association (the "Bank").
W I T N E S S E T H:
WHEREAS, the Borrower desires to borrow from the Bank a secured
revolving line of credit loan in the principal amount not to exceed
$25,000,000.00 (the "Revolving Loan"), all or part of which may be converted
from time to time into term loans in an aggregate principal amount of
$25,000,000.00 (each a "Term Loan" and collectively, the "Term Loans"), to be
extended by the Bank to the Borrower upon the terms and subject to the
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
In addition to terms defined elsewhere in this Credit Agreement,
certain terms used herein are defined in Section 1.01.
ARTICLE I
DEFINITIONS; ACCOUNTING TERMS; AMENDMENTS
Section 1.01 Definitions. As used herein and in the Revolving Note,
the Term Notes, and the other Loan Documents, the following terms shall have
the following meanings:
"Advances" means advances of cash proceeds obtained by the Borrower
in respect of the Revolving Loan.
"Affiliate" means any employee, officer, shareholder or partner of
the Borrower, or any spouse, parent, or child of any of the foregoing, or any
corporation, partnership or other business enterprise directly or indirectly
controlled by, or under direct, indirect or common control with, any one or
more of such Persons and/or the Borrower.
"Authorized Fiscal Officer" means the chief executive officer, chief
financial officer or president of the Borrower.
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"Bank" shall have the meaning given to it in the preamble of this
Credit Agreement.
"Borrower" shall have the meaning given to it in the preamble of this
Credit Agreement.
"Borrower's Certificate" shall have the meaning given to it in
Section 5.11.
"Business Day" means (i) any day in respect of which dealings in both
(a) United States Dollar deposits in the London inter-bank market and (b)
securities issued in the United States are, in both cases, carried on and (ii)
any day which is not a Saturday, Sunday or other day on which banks in the
District of Columbia are authorized or required to close.
"Capitalized Lease Obligations" means, as to any Person, the
obligations of such Person to pay rent or other amounts under leases of, or
other agreements conveying the right to use real or personal property, which
obligations are required to be classified and accounted for as capital leases
on a balance sheet of such Person, prepared in accordance with GAAP (including
the Statement of Financial Accounting Standards No. 13 of the Financial
Accounting Standards Board).
"Closing Date" means the date that the first Advance of the Revolving
Loan is disbursed to the Borrower under this Credit Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor statute, and the rules and regulations promulgated
thereunder.
"Collateral" shall have the meaning given to such term in Section
3.03.
"Collateral Lists" shall have the meaning given to such term in
Section 3.04.
"Collateral Security Documents" shall have the meaning given to such
term in Section 3.08.
"Conclusive" means that the calculation, determination or other
matter referred to is presumed for all purposes to be true and correct and
absolutely binding on the Borrower except to the extent (i) of manifest or
obvious error (e.g. misplacement of decimal points) or (ii) that the Borrower
by a preponderance of evidence in a good faith contest in which the Borrower
bears the burden of proof has established that another result is materially
different and true and correct.
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"Convert", "Conversion", and "Converted" refers to a conversion of
the Revolving Loan, or a portion thereof in excess of $1,000,000.00, into a
Term Loan or Term Loans pursuant to Section 2.05.
"Conversion Date" means the date specified in a Conversion Notice for
the commencement of a Term Loan as a result of a Conversion pursuant to Section
2.05.
"Conversion Notice" means the written notice of the Borrower to the
Bank of a Conversion pursuant to Section 2.05.
"Debt Instruments" shall have the meaning given to such term in
Section 11.01 of this Credit Agreement.
"Effective Date" means a date on which the Bank makes an Advance or a
Conversion Date.
"Environmental" means relating to pollution of the environment,
including air, soil, water and groundwater, and the effects of Hazardous
Substances, or toxic and solid wastes.
"Environmental Matters" means (a) any injury to person or property
resulting or allegedly resulting from Environmental claims, (b) any suits,
investigations, notices, orders, decrees or proceedings and other acts and
actions arising under any existing or future Environmental laws, rules,
regulations, orders, permits, decrees, notices of violation and other
Environmental claims, and (c) any compliance required under existing or future
Environmental laws, orders, permits, decrees, notices of violations and other
Environmental claims.
"Environmental Remediation" means the remediation, clean-up or other
resolution of Environmental matters in respect of which the Borrower has any
liability or obligation.
"Equity Interests" shall have the meaning given to such term in
Section 11.01 of this Credit Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
the regulations thereunder, each as amended from time to time.
"Event of Default" shall have the meaning specified in Article IX of
this Credit Agreement.
"Execution Date" means the date of this Credit Agreement first
written above.
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"Exhibits" and "Schedules" means and refers collectively to the
documents attached to this Credit Agreement and labeled as Exhibits or
Schedules hereto.
"federal", "state", or "local" means and relates to the United
States, its political divisions or states, and respective political
subdivisions, and equivalents thereof.
"Fixed Rate Indemnity" shall have the meaning specified in Section
2.15.
"Fixed Rate" means the Index, adjusted to a constant maturity equal
to the Term Loan Period designated in a Conversion Notice, for the weekly
auction which immediately precedes a Conversion Date.
"GAAP" means generally accepted accounting principles as applied in
the United States.
"Governmental Authority" shall have the meaning given to such term in
Section 4.03.
"Guaranteed" or to "Guarantee" as applied to any obligation shall
mean and include (a) a guarantee or guaranty (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
directly or indirectly, in any manner, of any part or all of such obligation
and (b) an agreement, direct or indirect, contingent or otherwise, and whether
or not constituting a guaranty, the practical effect of which is to assure the
payment or performance (or payment of damages in the event of non-performance)
of any part or all of such obligation whether by (i) the purchase of securities
or obligations, (ii) the purchase, sale or lease (as lessee or lessor) of
property or the purchase or sale of services primarily for the purpose of
enabling the obligor with respect to such obligation to make any payment or
performance (or payment of damages in the event of non-performance) of or on
account of any part or all of such obligation, or to assure the owner of such
obligation against loss, (iii) the supplying of funds to or in any other manner
investing in the obligor with respect to such obligation, (iv) repayment of
amounts drawn down by beneficiaries of letters of credit or (v) the supplying
of funds to or investing in a Person on account of all or any part of such
Person's obligation under a Guarantee of any obligation or indemnifying or
holding harmless, in any way, such Person against any part or all of such
obligation.
"Hazardous Substances" means any toxic substances or related
materials, including, without limitation, asbestos and any substances defined
as or included in the definition of "hazardous substances", "hazardous waste",
"hazardous materials", or "toxic substances" under any applicable law or
regulation of any state, province, country or local
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government (which include, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Hazardous
Materials Transportation Act, the Resource Conservation and Recovery Act, and
the Occupational Health and Safety Act).
"Income Difference" shall have the meaning given to such term in
Section 2.15.
"Indebtedness" as applied to any Person, including the Borrower,
means:
(i) All items (except items of capital stock or
capital surplus or of contingency reserves, dividends and
distributions payable by a Person, reserves or allowances for
deferred income taxes or reserves or allowances for unearned
revenues, accrued expenses and trade accounts payable for goods or
services purchased in the ordinary course of business that are not
the subject of a conditional sales contract or Capitalized Lease
Obligation and only so long as paid within ninety (90) days of the
delivery of such goods or rendering of such services except to the
extent contested in good faith by appropriate proceedings and for
which reserves have been set aside in accordance with GAAP) which in
accordance with GAAP applied on a consistent basis would be included
in determining total liabilities as shown on the liability side of a
balance sheet of any such Person as of the date on which
Indebtedness is to be determined, regardless of whether such
indebtedness shall be recourse indebtedness or otherwise; and
(ii) All indebtedness of others within the meaning of
(i) above which any such Person has directly or indirectly Guaranteed.
"Indebtedness for Borrowed Money" of any Person means at any date,
without duplication, (i) all obligations of such Person for borrowed money,
including, without limitation, all borrowing under insurance policies, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person to pay the deferred
purchase price for property or services, except accounts payable arising in the
ordinary course of business, (iv) all Capitalized Lease Obligations of such
Person, (v) all Indebtedness for Borrowed Money of others secured by a Lien on
any asset of such Person, whether or not such Indebtedness for Borrowed Money
is assumed by such Person, and (vi) all Indebtedness for Borrowed Money of
others Guaranteed by such Person.
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"Indemnified Liabilities" shall have the meaning given to it in
Section 12.01.
"Index" means the average of weekly auction rates for United States
Treasury Securities, as published by the Federal Reserve Board.
"Indicated Spread" means the amount of basis points to be added to the
various Interest Options.
"Interest Adjustment Date" means the last day of each Interest Period.
"Interest Option" means the Libor Rate or the Fixed Rate.
"Interest Period" shall mean a period of thirty, sixty or ninety days
(as selected by the Borrower) commencing on the date of each Advance or each
Conversion Date if a Term Loan is bearing interest based on the Overall Libor
Rate and ending on each Interest Adjustment Date with respect thereto. If the
Borrower fails to select a new Interest Period with respect to any portion of
the Loans subject to the Overall Libor Rate at least two (2) Business Days
prior to any Interest Adjustment Date, the Borrower shall be deemed to have
selected an Interest Period of the same duration as the immediately preceding
Interest Period. With respect only to that portion of a Term Loan (as described
in Section 2.10 hereof) which represents a mandatory quarterly installment of
principal, the Borrower may not select an Interest Period the maturity of which
would extend beyond the due date of such installment payment without becoming
subject to the provisions of Section 2.15 hereof.
"Investment Advisory Agreement" shall mean that certain Investment
Advisory Agreement dated May 11, 1995 by and between the Borrower and Allied
Capital Advisors, Inc. pursuant to which Allied Capital Advisors, Inc. manages
the assets of the Borrower.
"Investment Income" shall have the meaning given to it in Section
2.15.
"Investments" means all loans, advances, extensions of credit or
contributions of capital made by the Borrower to any Person evidenced and
secured by Debt Instruments or purchase by the Borrower or other acquisition by
the Borrower of the stock or notes or debentures or other securities of, or any
other Equity Interest in, any Person.
"Libor Rate" means, with respect to any Interest Period, a rate per
annum equal to the quotient obtained (rounded upwards, if necessary, to the
next highest 1/16 of 1%) by dividing (i) the rate of interest determined by the
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Bank two (2) Business Days prior to the first day of such Interest Period that
it would have to pay at 11:00 a.m. London time in the London inter-bank market
for inter-bank deposits of United States Dollars with a maturity approximately
equal to the Interest Period selected by the Borrower for the use of such rate
in determining the interest to be charged on all or part of the outstanding
principal balance of the Loans and in an amount equal to the amount of the
outstanding principal balance of the Loans on which interest will be determined
by the Libor Rate by (ii) 1.00 minus for any day that percentage (expressed as
a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
reserve requirement for the Bank in respect of "Eurocurrency liabilities" (or
in respect of any other category of liabilities which includes deposits by
reference to which the Libor Rate is determined).
"Lien" as applied to the property of any Person means: (a) any
mortgage, lien, pledge, charge, lease constituting a Capitalized Lease
Obligation, conditional sale or other title retention agreement, or other
security interest or encumbrance of any kind in respect of any property of such
Person, or upon the income or profits therefrom; (b) any arrangement, express
or implied, under which any property of such Person is transferred, sequestered
or otherwise identified for the purpose of subjecting the same to the payment
of Indebtedness for Borrowed Money in priority to the payment of the general,
unsecured creditors of such Person; and (c) the filing of, or any agreement to
give, any financing statement under the Uniform Commercial Code or its
equivalent of any jurisdiction in respect of Indebtedness for Borrowed Money.
"Loan Documents" means and includes this Agreement, the Notes, and the
Collateral Security Documents.
"Loans" means collectively the Revolving Loan and the Term Loans.
"Maximum Revolving Loan Amount" shall have the meaning given to such
term in Section 2.01 of this Credit Agreement.
"Notes" means collectively the Revolving Note and the Term Notes.
"Overall Fixed Rate" means the Fixed Rate plus the applicable
Indicated Spread.
"Overall Libor Rate" means the Libor Rate plus the applicable
Indicated Spread.
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"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"Performing Investments" means all Investments of the Borrower, less
any loans, advances or extensions of credit made by Borrower, whether under or
pursuant to Debt Instruments or Equity Interests, that are not performing as a
result of the existence or occurrence of a default or event of default
thereunder or related thereto.
"Permit" has the meaning given to such term in Section 4.03.
"Permitted Collateral Liens" means the permitted exceptions described
in clauses (i) through (v) of Section 7.01.
"Person" includes a corporation, an association, a partnership, an
organization, a trust or business trust, an individual, a government or
political subdivision thereof or a governmental agency or other entity.
"Plan" means any employee benefit plan as defined by ERISA of which
any Person is a sponsor, participating employer, or contributor.
"Pledge Agreements" shall have the meaning given to it in Section
3.05(ii).
"Possible Default" means an event or condition which, after notice or
lapse of time, or both, but the existence or occurrence of no other conditions,
would constitute an Event of Default.
"Pro Forma Balance Sheet" shall have the meaning given to it in
Section 4.04.
"Revolving Loan" shall have the meaning given to such term in the
recitals of this Agreement.
"Revolving Loan Commitment" shall have the meaning given to such term
in Part A of Article II.
"Revolving Note" means the revolving line of credit promissory note in
the form of Exhibit "A" attached hereto, as duly completed, executed and
delivered by the Borrower in favor of the Bank to evidence the Borrower's
indebtedness pursuant to the Revolving Loan.
"Revolving Period" shall have the meaning given to such term in
Section 2.02.
"Secured Obligations" shall have the meaning given to such term in
Section 3.02.
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"Security Agreement" shall have the meaning given to such term in
Section 3.05(i).
"Subsidiaries" means and includes any now existing or hereafter
created corporation, association, general partnership, limited partnership or
other business entity, (a) the majority (by number of votes) of the outstanding
stock of which is at the time in question owned or controlled by the Borrower
and/or by any Subsidiary of the Borrower, or (b) the majority of the
partnership interests, whether general or limited, of which is at the time
owned or controlled by the Borrower and/or by any Subsidiary of the Borrower.
"Tangible Net Worth" means the aggregate amount of a Person's stated
capital, including, without limitation, capital stock, paid in capital and
retained earnings, determined in accordance with GAAP, less the aggregate
amount of a Person's treasury stock, amounts due from officers, directors and
members of their immediate families, amounts due from Affiliates, investments
in Affiliated companies other than the Subsidiaries, goodwill, non-compete
agreements, capitalized expenses, costs associated with the closing of the
Loans and any other intangible assets.
"Taxes" means all federal, state and local or foreign income, payroll,
withholding, excise, sales, use, real and personal property, use and occupancy,
business and occupation, mercantile, real estate, capital stock and franchise
or other taxes, including interest and penalties thereon, and including
estimated taxes thereof.
"Tender Date" shall have the meaning given to such term in Section
2.15.
"Term Loan" and "Term Loans" shall have the meanings given to such
terms in the recitals set forth above.
"Term Loan Commitment" shall have the meaning given to such term in
Part B of Article II.
"Term Loan Maturity Date" shall have the meaning given to such term in
Section 2.10.
"Term Loan Period" shall have the meaning given to it in Section 2.08.
"Term Note" and "Term Notes" means (i) with respect to a Term Loan
bearing interest at the Overall Libor Rate, a term promissory note in the form
of Exhibit "B" attached hereto, as duly completed, executed and delivered by
the Borrower in favor of the Bank to evidence the Borrower's indebtedness
pursuant to a Term Loan and (ii) with respect to a Term Loan bearing interest
at the Overall Fixed Rate,
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a term promissory note in the form of Exhibit "C" attached hereto, as duly
completed, executed and delivered by the Borrower in favor of the Bank to
evidence the Borrower's indebtedness pursuant to a Term Loan.
"Total Debt" means Total Liabilities, less (i) the fees payable by the
Borrower to Allied Capital Advisers, Inc. under and pursuant to the terms of
the Investment Advisory Agreement, (ii) cash distributions payable to
shareholders of the Borrower, and (iii) accruals for deferred taxes and trade
accounts payable for goods or services purchased in the ordinary course of
business that are not the subject of a conditional sales contracts or
Capitalized Lease Obligations and only as long as paid within ninety (90) days
of the delivery of such goods or rendering of such services.
"Total Liabilities" means as of any date of determination thereof, the
sum of all Indebtedness for Borrowed Money and all other liabilities on a
balance sheet of a Person prepared in accordance with GAAP applied on a
consistent basis, and in any event, including all reserves and all deferred
taxes and other deferred items.
Whenever any agreement, instrument, promissory note, security
agreement, pledge agreement, or other instrument or document is defined in this
Credit Agreement, such definition shall be deemed to mean and include, from and
after the date of an amendment, restatement, or modification thereof, such
agreement, security agreement, pledge agreement, promissory note or other
instrument or document as so amended, restated or modified. To the extent that
the plural of any term defined herein is not defined in this Credit Agreement,
that usage of the plural in this Credit Agreement shall mean the plural of the
singular term so defined and if the defined term is plural, usage of the
singular of such term shall mean the singular thereof, in each case as the
context so requires. The words "hereof", "herein" or similar words shall refer
to this Credit Agreement and references to Sections or Articles shall mean
Sections or Articles of this Credit Agreement.
Section 1.02 Accounting Terms. Any accounting terms used herein and
not defined herein shall have the meaning ascribed to them by, and be
determined in accordance with, GAAP. All computations made pursuant to this
Agreement shall be made in accordance with GAAP consistently applied and all
balance sheets and other financial statements shall be prepared in accordance
with GAAP consistently applied.
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ARTICLE II
THE LOANS
Part A. The Revolving Loan
The Bank hereby establishes the commitment (the "Revolving Loan
Commitment") pursuant to which the Revolving Loan will be made to the Borrower,
subject to the terms and conditions hereinafter stated in this Credit
Agreement, as follows:
Section 2.01 Amount of the Revolving Loan.
(i) The principal amount of the Revolving Loan outstanding from time
to time shall not exceed $25,000,000.00 (the "Maximum Revolving Loan Amount").
(ii) The aggregate amount borrowed by the Borrower from the Bank
under the Revolving Loan Commitment shall constitute a single Revolving Loan
from the Bank regardless of how many Advances have been borrowed, repaid or
reborrowed.
Section 2.02 Advances; Revolving Period. The Borrower may obtain
Advances, from time to time, in respect of the Revolving Loan from the Bank
during a period (the "Revolving Period") commencing as of the Closing Date
until (i) the termination of the Revolving Loan Commitment pursuant to any
provision hereof or (ii) the date the Maximum Revolving Loan Amount is equal to
zero as a result of a Conversion or Conversions of the Maximum Revolving Loan
Amount to a Term Loan or Term Loans pursuant to Section 2.05, whichever shall
first occur, whereupon the Revolving Loan Commitment shall terminate and be of
no further force and effect. Subject to the other provisions hereof, during
the Revolving Period, Advances may be borrowed, repaid (in accordance with
Section 2.04) and reborrowed so long as the principal amount of the Revolving
Loan outstanding at any one time does not exceed the Maximum Revolving Loan
Amount.
Section 2.03 Interest on the Revolving Loan. The Borrower shall pay
interest on the Revolving Loan at the rate equal to the Libor Rate plus one
hundred fifteen (115) basis points. Interest on the Revolving Loan shall be
payable on the last day of each November, February, May and August during the
term of the Revolving Loan and on the last day of the Revolving Period.
Section 2.04 Repayment of the Revolving Loan; The Revolving Note.
The unpaid principal balance of the Revolving Loan shall be due and payable on
the last day of the Revolving Period, but in any event no later than on May 31,
1997.
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The obligation of the Borrower to pay the principal of and interest on
the Revolving Loan shall also be evidenced by the Revolving Note. The unpaid
principal balance of and interest accrued on the Revolving Loan shall be
determined by the ledgers and records of the Bank as maintained in accordance
with the Bank's ordinary practices to reflect Advances and payments under this
Credit Agreement and shall be Conclusive.
Section 2.05 Reduction of Maximum Revolving Loan Amount; Conversion
of Revolving Loan to a Term Loan or Term Loans. The Borrower shall have the
right at all times during the Revolving Period to permanently reduce the
Maximum Revolving Loan Amount in whole or in part, by giving ten (10) days
written notice to the Bank of its intent to Convert the Revolving Loan
Commitment or a portion thereof in excess of $1,000,000.00 to a Term Loan (each
such notice being hereinafter referred to as a "Conversion Notice").
Concurrently with each Conversion, the Borrower shall execute a Term Note, as
more particularly described in Section 2.08 below.
Section 2.06 Purpose of the Revolving Loan. The proceeds of the
Revolving Loan shall be used by the Borrower to make Investments in small
businesses.
Section 2.07 Commitment Fee. The Borrower shall pay to the Bank, in
arrears on the last day of each November, February, May and August during the
Revolving Period, a commitment fee based on the average difference between (i)
the Revolving Loan Commitment and (ii) the average unpaid principal balance of
the Revolving Loan plus the outstanding principal balance of all Term Loans
during the preceding quarter, computed at the rate of one-eighth of one percent
(.125%) per annum.
Part B. The Term Loans
The Bank hereby establishes the commitment (the "Term Loan
Commitment") pursuant to which a Term Loan or Term Loans will be made to the
Borrower, subject to the terms and conditions hereinafter stated in this Credit
Agreement, as follows:
Section 2.08 Aggregate Amount of the Term Loans; Conversion Date;
Term Loan Period. The Borrower and the Bank agree that the Revolving Loan may
be Converted to a Term Loan or Term Loans in an aggregate principal amount not
to exceed Twenty-Five Million Dollars ($25,000,000.00). Each Conversion Notice
delivered to the Bank pursuant to Section 2.05 shall specify (i) the date on
which a Conversion will occur (the "Conversion Date"), (ii) which of the
Interest Options set forth in Section 2.09 shall apply on the Conversion Date,
and (iii) the period of time for which the Term Loan shall be in effect (each
such
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period being hereinafter referred to as a "Term Loan Period"); provided,
however, that each Term Loan Period shall be for a period of five (5) years or
less and no Term Loan Period shall extend beyond the Term Loan Maturity Date
(as hereinafter defined).
Section 2.09 Interest on the Term Loans. The Borrower shall pay
interest on each Term Note at the rate of interest calculated on the basis of
one of the following Interest Options plus the Indicated Spread set forth
below:
(i) an Overall Libor Rate equal to the Libor Rate plus an Indicated
Spread equal to one hundred fifty (150) basis points; or
(ii) an Overall Fixed Rate equal to the Fixed Rate plus an Indicated
Spread equal to one hundred seventy-five (175) basis points.
Section 2.10 Repayment of the Term Loans; The Term Notes. The
principal amount of each Term Note and interest thereon shall be due and
payable on the last day of each calendar quarter, in equal quarterly
installments of principal calculated on a fully amortizing schedule equivalent
to the Term Loan Period (i.e., principal payments on a Term Loan with a three
(3) year Term Loan Period shall be calculated on the basis of a three (3) year
amortization schedule), plus interest thereon at the Interest Option selected
by the Borrower in its Conversion Notice, with a final installment of all
unpaid principal and interest due in full on the last day of the Term Loan
Period, but in any event by no later than May 31, 2002 (the "Term Loan Maturity
Date").
The obligation of the Borrower to pay the principal of and interest on
each Term Loan shall also be evidenced by a Term Note, which shall be executed
on each Conversion Date for the principal amount of the Revolving Loan being
Converted to a Term Loan. The unpaid principal balance of and interest accrued
on the Term Loans shall be determined by the ledgers and records of the Bank,
as maintained to reflect borrowings and payments under this Credit Agreement,
which shall be Conclusive.
Section 2.11 Purpose of Term Loans. The purpose of the Term Loans is
to refinance the Revolving Loan.
Part C. Terms Applicable to All Loans
Section 2.12 EuroDollar Deposits Unavailable or Libor Rate
Unascertainable. In the event that the Bank determines that dollar deposits in
the relevant amount are not available or that by reason of circumstances
affecting such market, adequate and reasonable means do not exist for
ascertaining the Libor Rate on an Effective Date then, the
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Bank shall promptly give notice of such determination to the Borrower. In any
such event, all Loans subject to the Libor Rate shall at the expiration of the
applicable Interest Period then in effect become subject to an alternative
index and an appropriate Indicated Spread selected by the Lender in the
exercise of its reasonable discretion, which results in a comparable yield to
the Lender. In the event that the circumstances causing any such
unavailability of deposits or inability to determine the Libor Rate shall
change or terminate so that the Libor Rate may again be determined, the Bank
shall so notify the Borrower and the Libor Rate shall again be available to the
Borrower with the applicable Indicated Spread.
Section 2.13 Interest Calculations. The interest payable on the
Loans shall be computed on a 360-day-per-year basis for the actual number of
days elapsed. All payments to be made by the Borrower under this Credit
Agreement and the Notes shall be made in immediately available funds by 2:00
p.m., District of Columbia time, to the Bank and any payment received after
such time shall be deemed received on the next following Business Day. Whenever
any payment under this Credit Agreement and the Notes shall be due on any day
that is not a Business Day, the date for payment thereof shall be extended to
the next succeeding Business Day. If the due date for any such payment is so
extended or extended for any other reason, including operation of law, or any
payment is received after a due date, interest shall accrue and be payable on
demand for such extended time.
Section 2.14 Prepayment. Subject to the provisions set forth in
Section 2.15, the Borrower may prepay the Loans in full or in part at any time.
No prepayment shall postpone the due date of any subsequent payment, nor shall
it change the amount of any payment otherwise required to be made under the
Loans.
Section 2.15 Fixed Rate Indemnity. (a) With respect to the Revolving
Loan and any Term Loan bearing interest at the Overall Libor Rate, the Borrower
shall compensate and pay the Bank for any documented costs and expenses
(whether internal or external), as determined by the Bank in its reasonable
discretion (including, without limitation, any interest paid by the Bank to
lenders of funds borrowed by it to fund and carry the portion of the Loans upon
which interest is being determined on an Overall Libor Rate and any loss
sustained by the Bank in connection with the reemployment of such funds), which
the Bank actually sustains: (1) if any repayment or prepayment occurs on a date
which is not the last day of an Interest Period applicable thereto, or (2) as a
consequence of any Event of Default or Possible Default under this Agreement.
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(b) The Borrower shall have the right to prepay each Term Note bearing
interest at an Overall Fixed Rate, in full or in part, upon payment to the Bank
of (i) the principal amount to be prepaid, (ii) all accrued interest thereon,
(iii) all fees and costs then due under the Collateral Security Documents, and
(iv) a prepayment fee calculated in accordance with the following formula:
(a) calculate the total amount of interest (the "Interest Income")
that would accrue to the Bank on account of the principal amount
prepaid between the date of prepayment (the "Tender Date") and the
last day of the Term Loan Period; then
(b) calculate the amount of investment income, less any and all costs
of making such an investment (the "Investment Income"), that would be
earned from the Tender Date until the last day of the Term Loan
Period, if the principal amount prepaid as of the Tender Date were to
be invested in a U.S. Treasury Xxxx obligation with a maturity date
most closely corresponding to the last day of the Term Loan Period,
bearing interest at the Index for the auction that is held immediately
prior to the Tender Date and in an amount equal to the amount of
principal prepaid for such period of time; then
(c) subtract the Investment Income from the Interest Income (the
"Income Difference"). If the Income Difference is positive, the
present value (as hereinafter defined) of the Income Difference shall
be the result of the computation under this formula (if the Income
Difference is negative, then the result of the computation shall be
zero). The present value of the Income Difference shall be calculated
by discounting at the rate of interest in effect on the Tender Date
for the Index, which Index shall be adjusted to a constant maturity
equal to the last day of the Term Loan Period.
Section 2.16 Late Charge. In the event that any payment or part of
any payment due under the Notes is not made within ten (10) days after the date
when the same is due, the Borrower shall pay to the Bank a late charge equal to
five percent (5%) of the delinquent payment. This charge shall be in addition
to any other sums due under the Notes or this Credit Agreement and any other
right or remedy the holder of the Notes may have.
Section 2.17 Default Rate. Upon the occurrence of any Event of
Default, each of the Notes shall bear interest during the pendency of such
Event of Default at a rate of interest equal to two percent (2%) per annum
above the rate of interest then in effect under each of the Notes.
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Section 2.18 Event of Default or Possible Default. The Borrower shall
not be entitled to obtain any Advance or to Convert any portion of the
Revolving Loan to a Term Loan if, at the time an Advance or Conversion is
requested, any Event of Default or Possible Default then exists or immediately
thereafter exists. Receipt by the Borrower of any Advances and the occurrence
of any Conversions, each in and of themselves, constitutes a continuing
representation and warranty by the Borrower that the representations and
warranties contained in Article IV continue to be accurate in all material
respects on and as of the time of such Advances or Conversions, with the same
effect as if made on and as of such date, and that the Borrower then is
entitled under this Credit Agreement to obtain the Advances or Conversions.
ARTICLE III
SECURITY
Section 3.01 Collateral Granted. All Collateral assigned, pledged or
otherwise granted under or in connection with this Credit Agreement shall be
granted to and or held by, as the case may be, the Bank for its sole benefit
and not in trust for, or for the benefit of the Borrower, any Affiliate or any
other Person.
Section 3.02 Debt Secured. All collateral and property assigned,
mortgaged, pledged or otherwise granted under or in connection with this Credit
Agreement shall secure:
(i) the payment of all principal of and interest
owing or outstanding on any of the Notes or the Revolving Loan or any
of the Term Loans, including, without limitation, future advances made
by the Bank which are or may be evidenced by the Notes, regardless of
whether the Bank was obligated to make such advances;
(ii) the payment of all amounts from time to time
owing to the Bank under or in connection with this Credit Agreement
and the Collateral Security Documents (as defined in Section 3.08
hereof);
(iii) the payment by the Borrower of all costs and
expenses (including attorneys' fees) incurred by the Bank in the
collection of any of the Loans or any of the Notes and in the
enforcement of its rights under this Credit Agreement, the Collateral
Security Documents, and the other Loan Documents;
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(iv) the payment by the Borrower of all sums
expended or advanced by the Bank pursuant to the terms of this Credit
Agreement, any Collateral Security Document or any other Loan
Document;
(v) the performance by the Borrower of all of its
obligations under this Credit Agreement, the Notes, the Collateral
Security Documents and the other Loan Documents; and
(vi) the payment of any and all other indebtedness
(including principal, interest or fees, if any) of any kind or description now
or hereafter owing by the Borrower to the Bank, including, without limitation,
overdrafts, amounts owing under other notes, bonds, debentures or other
evidences of indebtedness and interest rate protection arrangements and
contingent obligations.
All of the debt, liabilities and obligations described above shall be sometimes
hereinafter referred to as the "Secured Obligations."
Section 3.03 Collateral. The Borrower hereby grants and agrees to
grant to the Bank security interests and/or other liens in, and pledges and
assignments, of any and all of the Borrower's properties and assets, whether
now owned or existing or hereafter acquired or arising, including, but not
limited to, all Debt Instruments and Equity Interests (collectively the
"Collateral") which security interests, liens, pledges and assignments shall
have a first priority, except for Permitted Collateral Liens. The Borrower
agrees (i) to promptly execute and deliver all such agreements, documents and
instruments as the Bank shall from time to time reasonably request and (ii) to
take such other actions and to give such further assurances as the Bank shall
from time to time reasonably request to evidence, obtain and/or to perfect the
security interests, liens, pledges and assignments to be granted under this
Credit Agreement.
Section 3.04 Collateral Disclosure. On or prior to the Execution
Date, the Borrower shall deliver to the Bank such lists (the "Collateral
Lists"), which are attached hereto as Schedule 3.04, containing the following
information:
(i) identifying each place of business of the
Borrower;
(ii) identifying any lessee, bailee, warehouseman or
similar third party having possession of any property of the Borrower
which is part of the Collateral;
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(iii) identifying the places where records relating
to accounts receivable of the Borrower are maintained;
(iv) identifying all Debt Instruments;
(v) identifying all Equity Interests; and
(vi) identifying all patents, trademarks, service
marks, copyrights, franchises (including licenses to any of the
foregoing) in favor of or owned by the Borrower.
Upon the request of the Bank, the Borrower, as soon as possible but in any
event within twenty (20) days of such request, shall deliver to the Bank an
updated Collateral List as of the last day of the immediately preceding month,
such updated Collateral List to be certified by an Authorized Fiscal Officer.
The updated Collateral List shall set forth any changes which have occurred
since the previous Collateral List so that all such information is correct and
current as of the last day of the preceding month.
Section 3.05 Personal Property.
(i) Generally. On the Execution Date, the Borrower shall execute and
deliver to the Bank a Security Agreement with such additional assignments or
agreements required thereby (the "Security Agreement"), granting to the Bank a
valid security interest having the priority required by Section 3.03 and lien
covering all of the Collateral then owned or thereafter acquired by the
Borrower, in form and substance satisfactory to the Bank and its counsel,
together with related financing statements.
(ii) Stock Pledges. On the Execution Date, the Borrower shall execute
and deliver to the Bank pledge agreements (the "Pledge Agreements"), pledging
and granting a security interest to the Bank in all equity interests owned by
the Borrower in Allied Investment Corporation II and Allied Financial
Corporation II, in form and content satisfactory to the Bank and its counsel,
to secure the Obligations.
(iii) Casualty and Liability Insurance. The Collateral Security
Documents will require that the Bank be named as lender or mortgagee loss
payee, as applicable, on all casualty and liability insurance of the Borrower,
as well as an additional insured, and that none of such insurance policies may
be canceled or modified without at least thirty (30) days' prior written notice
to the Bank. The Collateral Security Documents shall contain provisions as to
the amount of such casualty and liability insurance and the payment of premiums
thereon.
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Section 3.06 Costs. The Borrower shall pay, to the fullest extent
permitted by law, on demand all reasonable costs, fees and expenses incurred by
the Bank and paid to third Persons in connection with the taking and/or
perfection of the Collateral, including, without limitation:
(i) fees and expenses incurred in preparing
Collateral Security Documents from time to time (including, without
limitation, attorneys' fees incurred in connection with preparing such
Collateral Security Documents);
(ii) all filing, recording and/or records search
fees and taxes;
(iii) attorneys' fees in connection with all legal
opinions required;
(iv) any appraisal and environmental report costs;
and
(v) all related costs, fees and expenses.
Section 3.07 Inconsistent Provisions. Except as provided in Section
6.05 hereof, in the event that the provisions of any Collateral Security
Document directly conflict with any provision of this Credit Agreement, the
provision of this Credit Agreement shall govern.
Section 3.08 Collateral Security Documents. The Security Agreement,
the Pledge Agreements and each other agreement, document or instrument executed
and/or delivered in connection with any of the foregoing shall be referred to
collectively as the "Collateral Security Documents" and singly as a "Collateral
Security Document."
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
The Borrower represents and warrants to the Bank as follows:
Section 4.01 Organization of the Borrower; Business and Property.
The Borrower is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its incorporation. The Borrower
has all requisite corporate power and authority to execute and deliver the Loan
Documents and to carry out the provisions thereof. The Borrower has full
power, authority, and legal right to own and operate its properties and to
carry on the business in which it engages and currently intends to engage. The
Borrower is qualified or otherwise entitled to
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do business in every jurisdiction in which qualification is necessary.
Attached hereto as Schedule 4.01 is a true and correct summary of the
capital structure, including all capital stock and Indebtedness for Borrowed
Money (excluding the Loans) of the Borrower.
Section 4.02 Authorization; Validity. The Borrower has taken all
action necessary to authorize the execution, delivery and performance by it of
the Loan Documents. This Credit Agreement is, and each of the other Loan
Documents when executed and delivered will be, legal, valid and binding upon
the Borrower and enforceable against the Borrower in accordance with their
respective terms. No consent, approval, or authorization of, or registration
or declaration with, any governmental authority or other Person is required in
connection with the execution, delivery and performance by the Borrower of any
of the Loan Documents.
Section 4.03 Permits. Set forth on Schedule 4.03 hereto is a list
describing the following information: (i) the name and address of each federal,
state or local governmental authority (a "Governmental Authority"), from which
the Borrower and its Subsidiaries have on the date of this Credit Agreement
(either directly or indirectly through another Person) any permit, license or
authorization to operate their respective businesses (a "Permit"), (ii) an
identification of each such Permit, (iii) whether any restriction is contained
in such Permit as to the assignment or transfer thereof, and (iv) the stated
expiration date of the Permit. The Borrower represents and warrants that it
has delivered a true, correct and complete copy of each Permit set forth on
Schedule 4.03 to the Bank, that no material default or breach by the Borrower
or its Subsidiaries exists under any Permit, that each Permit set forth on
Schedule 4.03 is in full force and effect in all material respects, is issued
to the Borrower or one of its Subsidiaries and is free and clear of any lien,
security interest or charge of any kind, except Permitted Collateral Liens and
restrictions generally imposed by the Governmental Authority which issued such
Permit, and that such Permits collectively constitute all the necessary
federal, state and local governmental authorizations required for operation of
the Borrower's and its Subsidiaries' businesses. The Borrower and its
Subsidiaries are not subject to any outstanding or, to the knowledge of the
Borrower, threatened citation by any Governmental Authority, having
jurisdiction with respect to the operation of their respective businesses.
Section 4.04 Projections and Financial Statements. The Borrower has
furnished to the Bank certain financial data and reports concerning the
Borrower, including,
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without limitation, a pro forma balance sheet of the Borrower attached as
Schedule 4.04 (the "Pro Forma Balance Sheet"). This data is complete and
correct in all material respects and fairly presents the financial condition of
the Borrower as of the date thereof, and such data concerning the future
financial performance of the Borrower, represents the Borrower's reasonable and
good faith estimate of projected future operations of the Borrower as of the
date of this Credit Agreement, based on the notes and assumptions stated
therein (which the Borrower believes to be currently valid assumptions), and
the Borrower does not presently anticipate any material deviations from such
projections.
Section 4.05 Financial Condition at Date of Credit Agreement. As of
the Execution Date, the Borrower will not have any material amount of
liabilities, contingent or otherwise, required to be reflected in accordance
with GAAP, which are not reflected in the Pro Forma Balance Sheet, other than
those liabilities arising in the ordinary course of business. As of the
Execution Date, the Borrower will not have any outstanding or existing
commitments for the purchase of land, buildings, equipment, materials, or
supplies, or any contracts for services, except for those made in the ordinary
course of business. Other than as set forth on Schedule 4.05, the Borrower is
not a party to any bonus or profit-sharing plan.
Section 4.06 No Adverse Changes. Since June 30, 1994, there has been
no material adverse change in the condition, financial or otherwise, of the
Borrower, and the business, operations, and properties of the Borrower have not
been substantially and adversely affected in any way as a result of any fire,
explosion, earthquake, accident, labor disturbance, requisition or taking of
property by any governmental authority, flood, riot, or act of God.
Section 4.07 Title to Properties; Patents, Trademarks, Etc. The
Borrower has good and marketable title to all of its properties and assets,
including, without limitation, the properties and assets reflected in the Pro
Forma Balance Sheet (excepting, however, property and assets sold or otherwise
disposed of in the ordinary course of business subsequent to said date). There
are no Liens of any nature whatsoever on any of the properties or assets of the
Borrower other than Permitted Collateral Liens. The Borrower owns or possesses
all the patents, trademarks, service marks, trade names, copyrights, and
licenses and rights with respect to the foregoing necessary for the conduct of
its business as it is now conducted, without any known conflict with the valid
rights of others which would be inconsistent with the conduct of its business
substantially as now conducted and as currently proposed to be conducted.
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Section 4.08 Litigation. Except as set forth on Schedule 4.08
hereto, there are no outstanding judgments against, or actions, suits or
proceedings pending or, to the knowledge of the Borrower, threatened against or
affecting the Borrower or its officers, at law or in equity or before or by any
federal, state, local or other governmental department, commission, board,
bureau, agency, or instrumentality, which involves the possibility of any
judgment or liability not fully covered by insurance or which may result in any
material, adverse change in its business, operations, properties, or assets or
condition, financial or otherwise.
Section 4.09 Compliance with Other Instruments. The Borrower is not
in default in the performance, observance, or fulfillment of any of the
material obligations, covenants, or conditions contained in any evidence of
Indebtedness for Borrowed Money or any lease or other instrument by which the
Borrower has acquired a real property interest. Neither the execution and
delivery of the Credit Agreement or the Loan Documents, nor the consummation of
the transactions contemplated thereby, nor compliance with the terms and
provisions thereof will violate the provisions of any applicable law or of any
applicable order or regulations of any governmental authority having
jurisdiction of the parties (excluding the Bank) to the Credit Agreement, or
the Loan Documents, or will conflict with any Permit, or will conflict with or
result in a breach of any of the terms, conditions or provisions of any
restriction or of any agreement or instrument to which the Borrower is now a
party, or will constitute a default thereunder, or will result in the creation
or imposition of any lien, charge, or encumbrance of any nature whatsoever upon
any of the properties or assets of the Borrower except in favor of the Bank.
Section 4.10 Material Restrictions. The Borrower is not a party to
any agreement or other instrument or party to any other document, including a
restriction which materially adversely affects its business, properties,
assets, operations, or conditions, financial or otherwise.
Section 4.11 Correctness of Data Furnished. Except as otherwise
specifically qualified elsewhere in this Credit Agreement or the Schedules or
Exhibits thereto, the Credit Agreement and all Schedules and Exhibits thereto,
taken as a whole, are true and correct in all material respects; and to the
knowledge of the Borrower, the matters disclosed in the Credit Agreement and
the Schedules and Exhibits thereto, taken as a whole, set forth all material
facts which specifically affect the business, properties or condition,
financial or otherwise, of the Borrower.
Section 4.12 Employee Benefits. The Borrower represents that:
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(i) Each Plan has been administered in compliance with the
requirements of Title I of ERISA and, if it has been treated as tax-qualified
under any provision of the Code, has been maintained in compliance with the
Code.
(ii) All required contributions of the Borrower to each Plan have
been made in a timely manner, and no Plan has had an accumulated funding
deficiency, whether or not waived.
(iii) The assets of each Plan that is a defined benefit pension plan
are sufficient to cover the present value of all liabilities of the plan on a
standard termination basis, determined as of the end of the most recent plan
year, except as disclosed on Schedule 4.12.
(iv) No event has occurred and no proceeding has been initiated, or
is anticipated by the Borrower to occur or to be initiated, that could subject
any Plan or the Borrower to any penalty, excise tax, fiduciary liability, or
any claim or liability for benefits that have not been funded or have been
decreased, with respect to any Plan by the Internal Revenue Service, U.S.
Department of Labor, or PBGC or any Plan participant or beneficiary, except as
disclosed on Schedule 4.12.
(v) No Borrower maintains or participates in any unfunded or
self-funded Plan or has made other promises or commitments, whether or not
contingent, to pay any nonwage employee benefits that have not been fully
funded, except as disclosed on Schedule 4.12.
(vi) No Borrower participates in any multiple or multi-employer Plan
with respect to which it has any potential withdrawal liability, except as
disclosed on Schedule 4.12.
The terms used in this Section 4.12 and Sections 6.09 and 7.09 have the
meanings given to the terms by ERISA and the Code or otherwise by accepted
industry usage.
Section 4.13 Taxes. Except for Taxes the payment of which are being
contested in good faith by appropriate proceedings for which reserves have been
set aside in accordance with GAAP and are fully described on Schedule 4.13, the
Borrower has (a) timely filed all returns required to be filed by it with
respect to all Taxes, (b) paid all Taxes shown to have become due pursuant to
such returns, and (c) paid all other Taxes for which a notice of assessment or
demand for payment has been received. All tax returns have been prepared in
accordance with all applicable laws and requirements and accurately reflect the
taxable income (or other measure of Tax) of the Borrower. The accruals for
Taxes contained in the Pro Forma Balance Sheet are adequate under GAAP to cover
all
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liabilities for Taxes for all periods ending on or before the date of such
balance sheet and include adequate provision for all deferred Taxes (including
deferred federal Taxes), and nothing has occurred subsequent to that date to
make any of such accruals inadequate. All Taxes for periods beginning after
the last date for which Tax returns were required to be filed through and
including the Execution Date have been paid or are adequately reserved against
on the books of the Borrower. The Borrower has timely filed all information
returns or reports which are required to be filed and has accurately reported
all information required to be included on such returns or reports. Except as
set forth in Schedule 4.13, there are no proposed assessments of Taxes against
the Borrower nor any proposed adjustments to any Tax return filed. The
Borrower has never (i) filed any consent or agreement under Section 341(f) of
the Code, (ii) executed a waiver or consent extending any statute of
limitations for any Tax liability which remains outstanding, (iii) joined in or
been required to join in filing a consolidated or combined Tax return, (iv)
applied for a Tax ruling other than a determination letter with respect to a
qualified employee benefit plan, (v) entered into a closing agreement with any
taxing authority, or (vi) filed an election under 338(g) or Section 338(h)(10)
of the Code or caused or permitted a deemed election under Section 338(e)
thereof to occur.
Section 4.14 Compliance with Laws. Except as described in Schedule
4.14, the Borrower and its Subsidiaries are in compliance in all material
respects with all laws, rules, regulations, court orders and decrees, and
orders of any governmental agency which are applicable to the Borrower and its
Subsidiaries or their respective properties, including, but not limited to, the
Small Business Investment Act of 1958 and the Investment Company Act of 1940.
Section 4.15 Environmental Matters. Except as disclosed in Schedule
4.15 attached hereto, the Borrower is conducting its business in compliance
with all applicable federal, state, and local Environmental laws including, but
not limited to, the Resource Conservation and Recovery Act, the Clean Air Act,
the Federal Water Pollution Control Act, the Toxic Substances Control Act, and
the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") (hereinafter "Environmental Laws"), and, there is not pending or, to
the best knowledge of the Borrower after diligent investigation, threatened
civil or criminal litigation, notice of violation or lien, or administrative
proceedings relating to Environmental Matters involving the Borrower. Except
as disclosed in Schedule 4.15, there is no condition or situation, including,
without limitation, any lien or encumbrance, with respect to Environmental
Matters which, either individually or in the aggregate, has or is reasonably
expected to have a material adverse effect
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on the business, operations, properties or condition (financial or otherwise)
of the Borrower. Except as disclosed in Schedule 4.15, the Borrower has
obtained from every federal, state, and local Governmental Authority, all
approvals, consents, licenses, permits, and orders pertaining to Environmental
Matters and necessary to carry on its business as currently conducted. The
Borrower has not transported Hazardous Substances or arranged for the
transportation, disposal or treatment of such Hazardous Substances to any
location which is the subject of federal, state, or local enforcement actions
or other investigations which may lead to material claims against the Borrower
for clean-up costs, remedial work, damages to natural resources or for personal
injury claims. The Borrower has not treated, stored, recycled or disposed of
any Hazardous Substances on any property now or previously owned or leased by
the Borrower which under current interpretation of current federal, state, and
local law could reasonably be expected to result in loss or liability to the
Borrower.
Section 4.16 Leases. The Borrower enjoys peaceful and undisturbed
possession under all material leases and other agreements and documents to
which it is a party as lessee or holder of any other real property interest or
under which it is operating.
Section 4.17 Regulation U, etc. None of the proceeds of any of the
Loans will be used, directly or indirectly, by the Borrower for the purpose of
purchasing or carrying, or for the purpose of reducing or retiring any
indebtedness or other liability which was originally incurred to purchase or
carry, any margin stock within the meaning of Reg U (12 CFR Part 221) of the
Board of Governors of the Federal Reserve System (herein called "Margin Stock")
or for any other purpose which might cause the transactions contemplated hereby
to be considered a "purpose credit" within the meaning of said Regulation U, or
which might cause this Credit Agreement to violate Regulation G, Regulation U,
Regulation T, Regulation X, or any other regulation of the Board of Governors
of the Federal Reserve System or the Securities Exchange Act of 1934. Upon
request, the Borrower will promptly furnish the Bank with a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to in
said Regulation U.
Section 4.18 Holding Company Act. The Borrower is not a "Holding
Company" or a "Subsidiary Company" of a "Holding Company", or an "Affiliate" of
a "Holding Company" or of a "Subsidiary Company" of a "Holding Company", as
such terms are defined in the Public Utility Holding Company Act of 1935, as
amended.
Section 4.19 Securities Act, etc. Neither the registration of any
security under the Securities Act of 1933, as amended, or any other federal,
state, or local
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securities laws, nor the qualification of the Loan Documents under the Trust
Indenture Act of 1939, as amended, is required in connection with the Loans or
the issuance and delivery of the Notes pursuant hereto.
Section 4.20 Name Changes. The Borrower has not, within the six-year
period immediately preceding the date of this Credit Agreement, except as
disclosed in Schedule 4.20 hereto, changed its name, been the surviving entity
of a merger or consolidation, or acquired all or substantially all of the
assets of any Person.
Section 4.21 Solvency. The Borrower is solvent and has assets having
a fair value in excess of the amount required to pay its probable liabilities
on its existing debts as they become absolute and matured, and has access to
adequate capital for the conduct of its business and the ability to pay its
debts from time to time incurred in connection therewith as such debts mature.
Section 4.22 No Default. No Possible Default or Event of Default has
occurred and is continuing.
Section 4.23 Principal Place of Business. The principal place of
business and chief executive office of the Borrower is set forth on Schedule
4.23. The books and records of the Borrower are housed at the locations listed
on Schedule 4.23A.
Section 4.24 Brokers, etc. The Borrower has not caused the Bank to
be under any obligation to pay any broker's fees, finder's fee or commission in
connection with the Loans or the transactions contemplated by the Credit
Agreement.
Section 4.25 Employee Controversies. There are no controversies
pending or, to the best of the Borrower's knowledge, threatened or anticipated,
between the Borrower and any of its respective employees.
ARTICLE V
CONDITIONS TO BORROWING
Part I
Conditions Precedent Agreement. The obligation of the Bank to extend
credit hereunder (including making the Revolving Loan, any Term Loans, and any
Advances) shall be subject to the satisfaction of the following conditions
prior to or concurrently with the effectiveness of this Credit Agreement, the
making of the Revolving Loan, the Conversion of the Revolving Loan or any
portion thereof to a Term Loan or Term Loans and any Advances hereunder:
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Section 5.01 Representations and Warranties. The representations and
warranties contained in Article IV shall be true in all material respects on
and as of the time of the making of the Revolving Loan and any Effective Date
with the same effect as if made on and as of such date.
Section 5.02 No Defaults. There shall exist no condition or event
constituting an Event of Default or Possible Default.
Section 5.03 Performance. The Borrower shall have performed and
complied with all material agreements and conditions contained herein required
to be performed or complied with by it prior to or at the time of the Making of
the Revolving Loan or any Effective Date.
Section 5.04 Insurance Report. The Borrower shall have delivered to
the Bank the insurance report required by Section 6.05.
Section 5.05 Notes, Collateral Lists and Collateral Security
Documents. The Bank shall have received the Notes, the Collateral Lists and
all of the Collateral Security Documents as required by Article III hereof and
accompanied by all documents and instruments required thereunder, duly executed
and delivered by the parties thereto.
Section 5.06 Disbursement Instructions. The Bank shall have received
disbursement instructions and supporting documentation from the Borrower
evidencing that the first Advance is being applied in accordance with Section
2.06.
Section 5.07 Opinion of Counsel for the Borrower. The Bank shall have
received the favorable opinion of counsel for the Borrower in form and
substance satisfactory to the Bank, substantially to the same effect as the
Borrower's representations and warranties set forth in Sections 4.01, 4.02,
4.03, 4.08 (to their knowledge), 4.09, 4.10, 4.14, 4.18 and 4.19. Such
opinions shall include a favorable opinion as to the validity and
enforceability of the security interests and the liens of the Bank pursuant to
the Collateral Security Documents, and such other matters relative to the
transactions contemplated by this Credit Agreement as the Bank and its counsel
may reasonably request.
Section 5.08 Corporate Proceedings. The Borrower shall have
delivered to the Bank, all dated as of the Execution Date (or as of a date
recent to the Execution Date) for itself and for each of its Subsidiaries:
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(i) copies of its certificate of incorporation,
certified by an authorized public officer of the respective
jurisdiction under which it is incorporated;
(ii) a certificate of good standing from the
jurisdiction under which it is incorporated, together with
certificates of good standing or authority to transact business or
similar certificates from each other state referred to in Section 4.01
where they have places of business or maintain records, in all cases
from the Secretary of State or comparable officer of such
jurisdiction;
(iii) a copy of its by-laws certified by its
secretary;
(iv) with respect to the Borrower, resolutions of
its Board of Directors, authorizing the execution, delivery and
performance of the Loan Documents (including, without limitation, this
Credit Agreement, and the Notes issued pursuant hereto), and the
consummation of the transactions contemplated thereby, certified by
its secretary or other authorized Person and, with respect to the
Subsidiaries, resolutions authorizing the consummation of the
transactions contemplated by the Pledge Agreements, certified by their
respective Secretaries or other authorized Person; and
(v) an incumbency certificate certifying the names
of its officers and their signatures, certified by its secretary.
Section 5.09 Payment of Fees; Expenses. The Borrower shall have
paid, or reimbursed the Bank for all fees and expenses of the Bank incurred in
connection with the extension of credit hereunder, including, but not limited
to the fees and expenses of the Bank's legal counsel.
Section 5.10 Schedules. The Bank shall have received and approved
(in its sole discretion) each of the Schedules attached hereto.
Section 5.11 Borrower's Certificate. The Bank shall have received a
Borrower's Certificate as of the Closing Date in the form attached hereto as
Exhibit "D" and made a part hereof (the "Borrower's Certificate").
Section 5.12 Insurance. On or before the Execution Date, the
Borrower shall furnish to the Bank copies of all fidelity bonds obtained by the
Borrower, together with
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evidence that the Borrower has adequate insurance from financially sound and
reputable insurers, covering all properties and risks usually insured by
business entities engaged in the same or similar activities and business as the
Borrower.
Section 5.13 Landlord's Waiver. The Bank shall have received a
satisfactory landlord's waiver from each real estate lessor of premises to the
Borrower, in form and content satisfactory to the Bank.
Section 5.14 Other Documents. The Bank shall have received such
other certificates, opinions, agreements and documents as it shall reasonably
request and the Bank, in its sole discretion, shall be satisfied with the
condition, financial and otherwise, of the Borrower.
Part II
Conditions Precedent to Subsequent Advances or Conversions. The
obligation of the Bank to make Advances or Convert the Revolving Loan or any
portion thereof to a Term Loan shall be subject to the satisfaction of the
following conditions prior to or concurrently with each such Advance or
Conversion:
Section 5.15 No Defaults. There shall exist no condition or event
constituting an Event of Default or Possible Default.
Section 5.16 Performance. The Borrower shall have performed and
complied with all material agreements and conditions contained herein required
to be performed or complied with by it prior to or at the time of the Advance
or Conversion.
Section 5.17 Representations and Warranties. The representations and
warranties contained in Article IV shall be true in all material respects on
and as of the time of the Advance or Conversion, with the same effect as if
made on and as of such date, after giving effect to such updated information,
reflecting transactions not prohibited by the terms of this Credit Agreement,
as is necessary to make such representations and warranties true in all
material respects as of such date.
Section 5.18 Borrower's Certificate. The Borrower shall have
delivered a duly completed Borrower's Certificate as of the date of each such
Advance and as of the date of each such Conversion.
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ARTICLE VI
AFFIRMATIVE COVENANTS OF THE BORROWER
Until all principal of and interest on the Loans and the Notes and all
other obligations, liabilities and indebtedness of the Borrower to the Bank
under this Credit Agreement have been paid in full:
Section 6.01 Payment of Amounts Due. The Borrower will make all
payments of the principal of and interest on the Loans and the Notes promptly
as the same become due under this Credit Agreement and/or the Notes.
Section 6.02 Existence, Business, etc. The Borrower will cause to be
done all things necessary to preserve and to keep in full force and effect its
existence and rights and will conduct its business in a prudent manner. The
Borrower will comply and cause its Subsidiaries to comply in all material
respects with all federal, state, and local laws and regulations material to
their businesses now in effect or hereafter promulgated by any properly
constituted governmental authority having jurisdiction. In connection with and
without limiting the generality of the foregoing, the Borrower will maintain
and preserve and cause its Subsidiaries to maintain and preserve its Permits
(including, without limitation, those listed on Schedule 4.03 hereto) granted
by the Governmental Authorities and other governmental authorities necessary to
operate their businesses in full force and effect and will take all action
which may be required to comply with all such laws and regulations now in
effect or hereafter promulgated by any federal, state, and local governmental
authority having jurisdiction over their businesses. The Borrower for itself
and for its Subsidiaries will obtain, renew and extend their Permits and will
give prompt written notice to the Bank of (i) any citation or order relating
thereto or any claim or notice of any default thereunder, (ii) any lapse or
other termination thereof, or (iii) any refusal of any Person to grant or
extend any of them.
Section 6.03 Maintenance of Properties. The Borrower will at all
times maintain, preserve, protect, and keep its properties used in the conduct
of its business in good repair, working order, and condition, ordinary wear and
tear excepted, and, from time to time, make all needful and proper repairs,
renewals, replacements, betterments, and improvements thereto, so that the
business carried on in connection therewith may be properly conducted at all
times.
Section 6.04 Payment of Taxes, etc. The Borrower will pay and
discharge all lawful Taxes, assessments, and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before
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the same shall become in default, as well as all lawful claims for labor,
materials, and supplies which, if unpaid, might become a lien or charge upon
such properties or any part thereof; provided, however, the Borrower shall not
be required to pay and discharge any such tax, assessment, charge, levy, or
claim so long as the validity thereof shall be contested in good faith by
appropriate proceedings and there shall be set aside on its books such reserves
with respect thereto as are required by GAAP. The Borrower will in all events
pay such tax, assessment, charge, levy or claim before the property subject
thereto shall be sold to satisfy any lien which has attached as security
therefor.
Section 6.05 Insurance. The Borrower will keep adequately insured,
by financially sound and reputable insurers, all properties of a character
usually insured by business entities engaged in the same or similar activities
and business against loss or damage resulting from fire or other risks insured
against by extended coverage and maintain in full force and effect public
liability insurance against claims for personal injury, death, or property
damage occurring upon, in, or about any properties occupied or controlled by
it, or through the operation of any motor vehicles or aircraft by any of their
agents or employees, or arising in any manner out of the business carried on by
it, all in such amounts as the Bank may from time to time reasonably request.
In addition, the Borrower shall maintain adequate errors and omissions
insurance and business interruption insurance. The Bank will be named lender
or mortgagee loss payee, as applicable, and an additional insured on all such
insurance policies. The Borrower will deliver to the Bank on or before the
Execution Date and at such other times as material changes may be effected in
the insurance coverage of the Borrower, certificates of the Authorized Fiscal
Officer of the Borrower containing a statement of the policies of insurance
covering the risks described herein in effect on the date of such certificate
and a statement that such policies comply with the provisions of this
subsection and accompanied by the endorsements naming the Bank as lender or
mortgagee loss payee, as applicable, and additional insured. To the extent, if
any, that the provisions of this subsection are inconsistent with any provision
of any of the Collateral Security Documents relating to insurance, the
provisions of such Collateral Security Document, as the case may be, shall
govern.
Section 6.06 Accounts and Reports of the Borrower. The Borrower will
maintain a standard system of accounting in accordance with GAAP and furnish to
the Bank the following reports prepared on an accrual basis:
(i) As soon as available, and in any event within
one hundred twenty (120) days after
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the end of each fiscal year of the Borrower, a complete audited
consolidated and consolidating annual financial statement together
with all notes thereto, prepared in reasonable detail and certified
without qualification by independent certified public accountants of
recognized standing selected by the Borrower and satisfactory to the
Bank, (the "Accountant") and certified by an Authorized Fiscal Officer
of the Borrower, which reports shall contain (w) balance sheets, (x)
statements of income and expense, (y) statements of cash flow, and (z)
reconciliations of net worth. The Accountant shall deliver to the
Bank a statement that the examination made in preparing and certifying
such report has not disclosed the existence of any condition or event
which constitutes an Event of Default or Possible Default or both, or
if such a condition or event exists, specifying the nature thereof;
and such other and further information as the Bank may reasonably
require;
(ii) As soon as available, and in any event within
forty-five (45) days after the end of each fiscal quarter an unaudited
consolidated and consolidating financial statement for the immediately
preceding fiscal quarter of the Borrower certified by an Authorized
Fiscal Officer of Borrower, which report shall contain (x) balance
sheets as of the end of such fiscal quarter (y) income and expense
statements for such fiscal quarter, including a year to date income
and expense statement and a comparison to the budget, all prepared in
accordance with GAAP, and (z) a statement that the examination made in
preparing and certifying such report has not disclosed the existence
of any condition or event which constitutes an Event of Default or
Possible Default, or both, or, if such a condition or event exists,
specifying the nature thereof;
(iii) Immediately after the occurrence of any
condition or event which constitutes an Event of Default or Possible
Default, notice of such condition or event and the action which the
Borrower proposes to take with respect thereto;
(iv) Upon the request of the Bank, copies of all
financial statements, audits, and reports which the Borrower and its
Subsidiaries may have made of or concerning their accounts, books, or
records, or which they have provided to any third party, including,
but not limited to, (y) all Securities and Exchange Commission
reporting documents when the same are released to
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the public, including, but not limited to, all annual 10-K's and
quarterly 10-Q's, and (z) the results of all audits or other
examinations conducted by the Securities and Exchange Commission, the
Small Business Administration or the Internal Revenue Service;
(v) As soon as available, and in any event within
forty-five (45) days after the end of each fiscal quarter of the
Borrower as and for the prior fiscal quarter (A) a detailed Portfolio
Valuation Report for all Investments, (B) a Past Due Report for all
Investments, and (C) a certificate of an Authorized Fiscal Officer of
the Borrower stating that as of such date no Possible Default or Event
of Default exists, or if such a condition or event exists, specifying
the nature thereof. The Bank shall have the right to confirm and
verify all of the information in the aforesaid reports by any manner
and through any medium it considers advisable and do whatever it may
deem reasonably necessary to protect its interests hereunder. The
items to be provided under this clause are to be in form satisfactory
to the Bank and executed by the Borrower and delivered to the Bank
from time to time solely for the Bank's convenience in maintaining
records with regard to the Loans, and the Borrower's failure to
deliver any of such items to the Bank shall not affect, terminate,
modify or otherwise limit the Bank's Lien on or security interest
granted pursuant to Article III and the Collateral Security Documents;
(vi) Promptly after filing, a copy of each annual
report (and related schedules) filed by the Borrower with any
governmental authority or agency in respect of any employee pension
benefit plan subject to ERISA;
(vii) As soon as available, and in any event within
sixty (60) days after the end of each December and June during the
term of the Loans, copies of the Borrower's semi-annual Credit Review
Report on each Investment in Borrower's portfolio;
(viii) As soon as available and in any event prior to
the end of each calendar year for the following calendar year, a
detailed annual budget, including projected principal payments due to
Borrower on existing Investments in Borrower's portfolio and
projections of anticipated growth in Investments during the upcoming
calendar year;
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(ix) Promptly upon request, such other information
respecting the business, properties or the condition or operations
(financial or otherwise) of the Borrower and its Subsidiaries as the
Bank may from time to time reasonably request (all such information to
be in such form and detail as the Bank shall reasonably request).
Section 6.07 Information and Inspection. The Borrower will furnish
to the Bank, from time to time, upon the request by the Bank, full information
pertinent to any covenant, provision, or condition of this Credit Agreement or
of any other Loan Document or to any matter in connection with its activities
and business, and at all reasonable times and as often as the Bank may
reasonably request, permit any authorized representative designated by the Bank
to visit and inspect (which visits and inspections shall be at the Borrower's
sole expense) during normal business hours any of its properties, including its
books (and to take extracts therefrom) and to discuss its affairs, finances,
and accounts with its officers and employees.
Section 6.08 Notice of Litigation. The Borrower will promptly notify
the Bank in writing of any litigation, legal proceeding or threat of legal
proceeding: (i) with any Person, including, without limitation, the
Governmental Authorities and any member of the staff or any representative of
any such Person, which involves the threat of termination of any agreements or
contracts which are material to the operations of the Borrower or its
Subsidiaries; or (ii) involving amounts in excess of $1,000,000.00 affecting
the Borrower or its Subsidiaries, whether or not fully covered by insurance,
and regardless of the subject thereof (excluding, however, any actions relating
to worker's compensation claims, if fully covered by insurance).
Section 6.09 Employee Benefits. The Borrower shall (a) assure that
each Plan continues to comply with the requirements of Title I of ERISA, and
where tax-qualified, continues to comply with the requirements of the Code, (b)
make all required contributions to each Plan in a timely manner, and (c)
promptly inform the Bank of any material change in the representations of
paragraphs (iii) and (iv) of Section 4.12.
Section 6.10 Unconsolidated Ratio of Total Liabilities to Tangible
Net Worth. For each fiscal quarter of the Borrower, commencing with the fiscal
quarter ending September 30, 1995, the Borrower will maintain, on an
unconsolidated basis determined in accordance with GAAP consistently applied, a
ratio of Total Liabilities to Tangible Net Worth of not more than 1.0 to 1.0,
as determined at the end of each fiscal quarter based on the
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quarterly financial statements of the Borrower described in Section 6.06(ii).
Section 6.11 Consolidated Ratio of Total Liabilities to Tangible Net
Worth. For each fiscal quarter of the Borrower, commencing with the fiscal
quarter ending September 30, 1995, the Borrower will maintain, on a
consolidated basis determined in accordance with GAAP consistently applied, a
ratio of Total Liabilities to Tangible Net Worth of not more than 1.0 to 1.0,
as determined at the end of each fiscal quarter based on the quarterly
statements of the Borrower described in Section 6.06(ii).
Section 6.12 Unconsolidated Ratio of Performing Investments to Total
Debt. For each fiscal quarter of the Borrower, commencing with the fiscal
quarter ending September 30, 1995, the Borrower will maintain, on an
unconsolidated basis determined in accordance with GAAP consistently applied, a
ratio of Performing Investments to Total Debt of at least 2.0 to 1.0, as
determined at the end of each fiscal quarter based on the quarterly statements
of the Borrower described in Section 6.06(ii).
Section 6.13 Unconsolidated Interest Coverage Ratio. For each fiscal
year of the Borrower, commencing with the fiscal year ending December 31, 1995,
the Borrower will maintain on an unconsolidated basis determined in accordance
with GAAP consistently applied, a ratio of the line item in the Borrower's
annual financial statement for Net Investment and Other Income Before Net
Realized Gain and Net Unrealized Appreciation (Depreciation) on Investments to
interest expense of 1.5 to 1.0, as determined at the end of each fiscal year
based on the annual audited statements of the Borrower described in Section
6.06(i).
Section 6.14 Consolidated Interest Coverage Ratio. For each fiscal
year of the Borrower, commencing with the fiscal year ending December 31, 1995,
the Borrower will maintain on a consolidated basis determined in accordance
with GAAP consistently applied, a ratio of the line item in the Borrower's
annual financial statement for Net Investment and Other Income Before Net
Realized Gain and Net Unrealized Appreciation (Depreciation) on Investments to
interest expense of 1.5 to 1.0, as determined at the end of each fiscal year
based on the annual audited statements of the Borrower described in Section
6.06(i).
Section 6.15 Deposit Accounts. In consideration for the Bank
extending credit to the Borrower pursuant to this Credit Agreement at the
interest rates, and subject to the costs and expenses provided for herein, the
Borrower agrees that from the Execution Date and thereafter so long as the
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Notes remain unpaid, Borrower shall maintain with Bank all of Borrower's
primary deposit accounts.
Section 6.16 Post-Closing Items. The Borrower will promptly perform
and complete to the satisfaction of the Bank each of the matters, if any, set
forth on Schedule 6.14 attached hereto (the "Listed Matters") on or before the
date set forth on Schedule 6.14 for the performance and completion thereof (the
"Satisfaction Date").
Section 6.17 Further Assurances. The Borrower agrees to execute and
deliver to the Bank any agreements, documents and instruments, including,
without limitation, additional promissory notes as replacements or
substitutions as may be required by the Bank, and to take such other actions as
reasonably requested by the Bank to effect the transactions contemplated
hereby.
Section 6.18 On-Site Inspection. The Borrower shall cooperate with
representatives of the Bank in the Bank's on-site annual review (or more
frequent on-site reviews as determined necessary by the Bank) of the Borrower's
Investments and procedures with respect thereto.
Section 6.19 Compliance with Law. The Borrower shall comply and
cause its Subsidiaries to comply in all material respects with all laws, rules,
regulations, court orders and decrees, and orders of any governmental agency
which are applicable to the Borrower and its Subsidiaries, including, but not
limited to, the Small Business Investment Act of 1958 and the Investment
Company Act of 1940.
ARTICLE VII
NEGATIVE COVENANTS OF THE BORROWER
Until all principal of and interest on the Loans and the Notes and all
other obligations, liabilities, and indebtedness of the Borrower to the Bank
under this Credit Agreement have been paid in full, the Borrower will not,
without the prior written consent of the Bank (which consent will not be
unreasonably withheld):
Section 7.01 Limitation on Liens. Create, incur, assume, or suffer
to be created, or incurred, or assumed, or to exist, or cause or permit any
Subsidiary to create, incur, assume, or suffer to be created, or incurred, or
assumed, or to exist, any Lien of any kind on any of their respective
properties or assets, including, but not limited to, the cash, accounts
receivable, negotiable instruments, marketable securities, inventory,
furniture, fixtures and equipment, Debt Instruments and Equity Interests of the
Borrower and its Subsidiaries, or own or acquire, or agree
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to acquire any property of any character subject to or upon any mortgage,
conditional sale agreement, or other title retention agreement; provided,
however, that the foregoing restrictions shall not prohibit:
(i) Liens in favor of the Bank;
(ii) Liens for taxes, assessments, governmental
charges, levies, or similar claims, if payment thereof shall not yet
be due or if the obligation to pay is being contested in good faith by
appropriate proceedings and adequate reserves with respect thereto
shall have been set aside on the books of the Borrower or its
Subsidiaries, as applicable, but in any event only so long as the sale
of property subject to such lien is not imminent by reason of
non-payment;
(iii) Liens of carriers, warehousemen, mechanics,
laborers, landlords, and materialmen, in each case, incurred in the
ordinary course of business for sums not yet due or if the obligation
to pay is being contested in good faith by appropriate proceedings and
adequate reserves with respect thereto shall have been set aside on
the books of the Borrower or its Subsidiaries, as applicable, but in
any event only so long as the sale of property subject to such lien is
not imminent by reason of non-payment;
(iv) Liens in the ordinary course of business in
connection with worker's compensation or unemployment insurance or
social security;
(v) Liens securing the indebtedness of Allied
Investment Corporation II and Allied Financial Corporation II
permitted by Section 7.02(iv) and (v);
(vi) Liens in the form of repurchase agreement
obligations in a dollar amount not to exceed $1,800,000.00 securing
the indebtedness of the Borrower permitted by Section 7.02(vii); and
(vii) Liens subordinate to the Bank's Liens securing
current Indebtedness incurred in the ordinary course of business
(excluding Indebtedness for Borrowed Money or represented by bonds,
notes or other securities) in an aggregate amount not to exceed
$250,000.00 at any time.
Section 7.02 Limitation of Indebtedness. The Borrower will not
create, incur, assume, become or be liable in any manner in respect of, any
Indebtedness, or
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cause or permit the Subsidiaries of the Borrower to create, incur, assume,
become or be liable in any manner in respect of, any Indebtedness, except:
(i) Indebtedness in respect of the Loans;
(ii) unsecured current Indebtedness and deferred
liabilities incurred in the ordinary course of business (excluding
Indebtedness for Borrowed Money or represented by bonds, notes, or
other securities);
(iii) unsecured Indebtedness in respect of
performance bonds, accrued salaries, wages and other compensation, in
each case, to the extent incurred in the ordinary course of business;
(iv) secured Indebtedness for Borrowed Money of
Allied Investment Corporation II to the Small Business Administration,
if and only to the extent that the ratio of Total Liabilities to
Tangible Net Worth of Allied Investment Corporation II does not exceed
1.0 to 1.0, as determined by the Bank on the basis of the quarterly
financial statements described in Section 6.06(ii);
(v) secured Indebtedness for Borrowed Money of
Allied Financial Corporation II to the Small Business Administration,
if and only to the extent that the ratio of Total Liabilities to
Tangible Net Worth of Allied Financial Corporation II does not exceed
1.0 to 1.0, as determined by the Bank on the basis of the quarterly
financial statements described in Section 6.06(ii);
(vi) Indebtedness for taxes, assessments,
governmental charges, liens, or similar claims to the extent that
payment thereof shall not yet be due or if the obligation to pay is
being contested in good faith by appropriate proceedings and adequate
reserves with respect thereto shall have been set aside on the books
of the Borrower or its Subsidiaries, but in any event only so long as
the sale of property subject to such Lien is not imminent by reason of
non-payment;
(vii) secured Indebtedness in respect of letters of
credit issued for the account of the Borrower in the aggregate amount
not to exceed $1,800,000.00; and
(viii) secured Current Indebtedness incurred in the
ordinary course of business (excluding Indebtedness for Borrowed Money
or represented by bonds, notes, or other securities) in an aggregate
amount, together with the amount described in
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subsection 7.03(iv), not to exceed $250,000.00 at any time.
Section 7.03 Guarantees. Guarantee, or otherwise become surety in
respect of the obligations of, or lend its credit to, any other Person, or
enter into any working capital maintenance or similar agreement, or cause or
permit any of its Subsidiaries to guarantee, or otherwise become surety in
respect of the obligations of, or lend its credit to any person or enter into
any working capital maintenance or similar agreement, except that the Borrower
and its Subsidiaries may endorse negotiable instruments for deposit or
collection in the ordinary course of its business and except for the Guarantees
of:
(i) unsecured current Indebtedness and deferred
liabilities incurred in the ordinary course of business (excluding
Indebtedness for Borrowed Money or represented by bonds, notes, or
other securities);
(ii) unsecured Indebtedness in respect of performance
bonds, accrued salaries, wages and other compensation, in each case,
to the extent incurred in the ordinary course of business;
(iii) Indebtedness for taxes, assessments,
governmental charges, liens, or similar claims to the extent that
payment thereof shall not yet be due or if the obligation to pay is
being contested in good faith by appropriate proceedings and adequate
reserves with respect thereto shall have been set aside on the books
of the Borrower or its Subsidiaries, but in any event only so long as
the sale of property subject to such Lien is not imminent by reason of
non-payment; and
(iv) secured Current Indebtedness incurred in the
ordinary course of business (excluding Indebtedness for Borrower Money
or represented by bonds, notes, or other securities) in an aggregate
amount, together with the amount described in subsection 7.02(viii),
not to exceed $250,000.00 at any time.
Section 7.04 Management; Investment Advisory Agreement. Make or
permit any change in the senior management of the Borrower in effect on the
date of this Credit Agreement nor make or permit any change in the Investment
Advisory Agreement.
Section 7.05 Assignment or Sale of Accounts or Notes Receivable.
Assign, sell, discount, or otherwise dispose of any accounts or notes
receivable or trade acceptances, or compromise, adjust, reduce, extend the
terms of, grant additional discounts, allowances, credits or accept returns in
respect of any account receivable or cause or permit any
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Subsidiaries of the Borrower to assign, sell, discount, or otherwise dispose of
any accounts or notes receivable or trade acceptances, or compromise, adjust,
reduce, extend the terms of, grant additional discounts, allowances, credits or
accept returns in respect of any account receivable; provided however, that
such restrictions shall not be applicable as long as no Possible Default or
Event of Default has occurred or exists, and such actions shall only be taken
in the ordinary course of business and only to the extent that the Bank is
granted a Lien on any proceeds thereof or therefrom.
Section 7.06 Liquidation, Merger, or Consolidation. Dissolve or
liquidate, or consolidate with or merge with or into any Person or otherwise
effect any business combination with any Person without the Bank's prior
written consent.
Section 7.07 Amendment of Certificate of Incorporation and/or
By-Laws. Amend, modify, or supplement the Borrower's certificate of
incorporation and/or its by-laws in any material respect.
Section 7.08 Disposition of Assets. Sell, lease or otherwise dispose
of any part of Borrower's assets to any Person, including, but not limited to
Subsidiaries, or permit any Subsidiary of the Borrower to sell, lease or
otherwise dispose of any part of the Subsidiaries' assets to any Person,
except, so long as no Possible Default or Event of Default has occurred or
exists, sales in the ordinary course of business, provided the Bank is granted
a Lien on proceeds thereof or therefrom.
Section 7.09 Employee Benefits. The Borrower shall not (a) adopt any
new Plan or create any new benefits under any existing Plan, including any new
benefit, benefit increase, or extension of benefit coverage, or make any new
promises or commitments to pay any nonwage employee benefits, whether or not
such benefits are funded, self-funded, or unfunded, (b) terminate any Plan for
which benefits are guaranteed by the PBGC, whether a standard or distress
termination, or (c) withdraw from any Plan for which any Borrower has a
liability, even if the Borrower intends to pay such liability, without 60 days
advance notice to and approval from the Bank.
Section 7.10 Regulation U. Apply any part of the proceeds of the
Loans to (a) the purchasing or carrying of any "margin stock" within the
meaning of Regulations G, T, U or X of the Federal Reserve Board, or any
regulations, interpretations or rulings thereunder, (b) extend credit to others
for the purpose of purchasing or carrying any such margin stock, or (c) retire
Indebtedness which was incurred to purchase or carry any such margin stock.
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Section 7.11 Environmental Compliance.
(a) Treat, store for more than ninety (90) days (or
such longer periods as are lawful for smaller quantity generators),
recycle or dispose of Hazardous Substances on any property owned or
leased by the Borrower, except in compliance with applicable laws,
regulations, or permits; or dispose of or release reportable
quantities of Hazardous Substances on any property owned or leased by
the Borrower;
(b) Purchase or lease any property where, to the
best knowledge of the Borrower, after all appropriate inquiry
consistent with good commercial or customary practice, Hazardous
Substances have been disposed or released; or
(c) Fail to comply in full with all clean-up or
remediation required under any Environmental law or order of any
governmental authority concerning property owned or leased by the
Borrower, except to the extent that compliance is being contested in
good faith by appropriate proceedings and reserves are established or
other appropriate provisions made therefor in accordance with GAAP.
Section 7.12 Transaction with Affiliates. Except for (i) the fee
payable to Allied Capital Advisors, Inc. under and pursuant to the Investment
Advisory Agreement, (ii) loans or advances to Subsidiaries of the Borrower, and
(iii) loans or advances to officers of the Borrower for the sole purpose of
exercising vested stock options in the Borrower, the Borrower shall not,
directly or indirectly, pay (excluding in all cases salary, bonuses and other
similar compensation payable in the ordinary course of business as customary
and reasonable compensation to any Affiliate who is a full-time employee of the
Borrower) any funds to or for the account of, make any Investment in, purchase,
acquire or lease any property from, or sell, transfer or lease any property to,
or otherwise deal with, in the ordinary course of business or otherwise, any
Affiliate except on terms that are no less favorable to the Borrower than those
terms which might be obtained at the time from unrelated third parties or
otherwise on terms consistent with the past practices of the Borrower and its
Affiliates relating to the allocation of the amount of investments made by the
Borrower and its Affiliates, provided that the return on such investments is
shared in a manner which is consistent with any such allocation.
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ARTICLE VIII
WAIVERS
Any of the acts which the Borrower is required or prohibited from
doing by any of the provisions of this Credit Agreement may, notwithstanding
such provisions, be omitted or done, as the case may be, only if the Bank by an
instrument in writing, has given its prior consent thereto.
ARTICLE IX
DEFAULTS
Each of the following events shall be termed "Events of Default":
Section 9.01 Principal Default. Default shall be made in the payment
of any principal of any of the Notes or any of the Loans when and as the same
shall become due and payable, whether at maturity or otherwise and such default
shall continue uncorrected for a period of five (5) days; or
Section 9.02 Interest Default. Default shall be made in the payment
of any interest on or with respect to any of the Notes or any of the Loans when
the same shall become due and payable and such default shall continue
uncorrected for a period of five (5) days; or
Section 9.03 Other Payment Defaults. Default shall be made in the
payment of any other amount when and as the same shall become due and payable
under the terms of this Credit Agreement or any of the Loan Documents in an
aggregate amount of $1,000.00 or more and such default shall continue
uncorrected for a period of five (5) days after written notice of such default
from the Bank to the Borrower; or
Section 9.04 Other Provision Default. Default shall be made in the
due observance or performance of any other covenant, agreement, or provision of
this Credit Agreement to be performed or observed by the Borrower or its
Subsidiaries and such default shall continue uncorrected for a period of
fifteen (15) days after written notice of such default from the Bank to the
Borrower; or
Section 9.05 Representation and Warranty. Any material
representation or warranty made by the Borrower under this Credit Agreement or
in any certificate, report, instrument, financial statement or other document
furnished pursuant to this Credit Agreement shall prove to have been false or
incorrect in any material respect as of the date on which made; or
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Section 9.06 Collateral Security Document or Other Loan Document
Default. Default shall be made in the due observance or performance of any
covenant, agreement, or provision of any Collateral Security Document or other
Loan Document (other than as provided elsewhere in this Article IX) to be
performed or observed by the Borrower and such default shall continue
uncorrected for a period of fifteen (15) days after written notice of such
default from the Bank to the Borrower; or
Section 9.07 Collateral Security Document Representation and
Warranty. Any representation or warranty made by the Borrower under any
Collateral Security Document, or in any certificate, report, instrument,
financial statement or other document furnished pursuant to any of the
foregoing shall prove to have been false or incorrect in any material respect
as of the date on which made; or
Section 9.08 Financial Difficulties. Any of the following events
evidencing the financial difficulties of the Borrower or its Subsidiaries shall
occur:
(i) any admission in writing of inability to pay
debts as they become due or the failure to pay debts generally as such
debts become due; or
(ii) the entry of an order for relief in the name of
the Borrower or a Subsidiary of the Borrower under Title 11 of the
United States Code or similar provisions of foreign law; or
(iii) the Borrower or a Subsidiary of the Borrower
shall make an assignment for the benefit of creditors; or
(iv) the Borrower or a Subsidiary of the Borrower
shall consent to the appointment of a trustee or receiver for all or a
major part of its property; or
(v) the commencement of a case by the Borrower or a
Subsidiary of the Borrower under Title 11 of the United States Code or
similar provisions of foreign law; or
(vi) the commencement of a case under Title 11 of
the United States Code or similar provisions of foreign law against
the Borrower or a Subsidiary of the Borrower, which case shall not be
dismissed within sixty (60) days from the date of commencement; or
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(vii) the entry of a court order appointing a
receiver or a trustee for all or a major part of the Borrower's
property or the property of a Subsidiary of the Borrower without
consent, which order shall not be vacated, denied, set aside, or
stayed within sixty (60) calendar days from the date of entry.
Section 9.09 Permit and Real Estate Default. Default by the Borrower
or its Subsidiaries shall occur in any material respect in (i) any Permit
(including, without limitation, those listed on Schedule 4.03) necessary for
the operation of the business of the Borrower or its Subsidiaries; (ii) any
material deed, lease, easement, license, permit or other document with respect
to the Borrower's ownership, leasing or use of real estate or (iii) with regard
to any of the items set forth in the foregoing clauses (i) and (ii), the terms
thereof shall have expired without the Borrower or its Subsidiaries obtaining a
renewal thereof or a new term of years such that the Borrower's or Subsidiary's
rights thereunder are, or may be, terminated, and in any such event, such
default shall continue uncorrected for a period of thirty (30) days after
written notice of such default from the Bank to the Borrower.
Section 9.10 Cross-Default. (a) Default shall be made by the
Borrower or its Subsidiaries in the payment when due of Indebtedness (whether
principal, interest or premium) now or hereafter owing by it (other than to the
Bank under this Credit Agreement and other than accounts payable to trade
creditors for amounts incurred in the ordinary course of business and not
evidenced by promissory notes, bonds or similar instruments) or (b) default
shall be made by the Borrower or its Subsidiaries in the performance of any
covenant or other obligation contained in any agreement, indenture, lease or
other instrument or document relating to, evidencing, or securing such
Indebtedness if the effect of the default is to permit the holder of such
Indebtedness (without the giving of notice or the lapse of time or both) to
accelerate the maturity thereof, and if any such default occurs with respect to
Indebtedness other than the Indebtedness described in Sections 7.02(iv) and
(v), the amount in question is $250,000.00 or more.
Section 9.11 Judgments. Entry of a final judgment (a final judgment
being one for which all available appeals have been exhausted or the time for
taking such appeal has lapsed) against the Borrower or its Subsidiaries in the
amount or $250,000.00 or more and the same is not discharged or satisfied
within thirty (30) consecutive days from the date of entry.
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Section 9.12 Restraint on Business. Any court or administrative or
regulatory agency shall have issued an injunction or order that materially
restricts or enjoins the Borrower or its Subsidiaries from conducting any
material part of its business as now conducted.
ARTICLE X
REMEDIES
Section 10.01 Acceleration. Upon (i) the occurrence of any Event of
Default described in Article IX, excluding Section 9.10, the Bank may, at any
time (unless all Events of Default shall theretofore have been remedied or
waived in accordance with the terms of this Credit Agreement), terminate the
Revolving Loan Commitment and the right of the Borrower to obtain Advances in
respect of the Revolving Loan or Convert the Revolving Loan or any part thereof
to a Term Loan, and/or declare the unpaid principal amount of any or all of the
Loans and/or Notes, all interest accrued thereon and all other amounts owing by
the Borrower to the Bank to be immediately due and payable, and (ii) upon the
occurrence of any Event of Default under Section 9.10, without further action
by the Bank, the right of the Borrower to obtain Advances in respect of the
Revolving Loan and the Revolving Loan Commitment or to Convert the Revolving
Loan or any part thereof to a Term Loan shall be immediately terminated and the
unpaid principal of the Loans and/or Notes and interest accrued thereon and all
other amounts owing by the Borrower to the Bank shall be immediately due and
payable and, in either case, such principal, interest and other amounts shall
thereupon be immediately due and payable, without presentment, demand, protest,
notice of protest, or other notice of any kind, all of which are hereby
expressly waived by the Borrower.
Section 10.02 Recovery of Amounts. In case any one or more Events of
Default shall occur, the Bank shall be entitled to recover judgment against the
Borrower for the amount due either before, or after, or during the pendency of
any proceedings for the enforcement of any security therefor, and, in the event
of realization of any funds from any security and application thereof to the
partial payment of the amounts due, the Bank shall be entitled to enforce
payment of and recover judgment for all amounts then remaining due and unpaid.
In case any one or more Events of Default shall happen the Bank may proceed to
protect and enforce its rights by suit in equity, action at law, and/or by any
other appropriate proceeding, including, without limitation, for the specific
performance of any covenant or agreement or in aid of the exercise of any power
granted to the Bank, or may proceed to enforce payment of the Notes or to
enforce any other legal or equitable right.
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Section 10.03 Remedies Cumulative. The Bank may pursue the rights or
remedies of the holders of the Notes under this Credit Agreement, independently
or concurrently. All rights, remedies, or powers herein conferred upon the Bank
shall, to the extent not prohibited by law, be deemed cumulative and not
exclusive of any other rights, remedies, or powers available to the Bank.
Without limiting the foregoing, the rights and remedies of the Bank under this
Credit Agreement, the Notes, and the other Loan Documents, are cumulative, may
be exercised simultaneously or in such order and at such times as the Bank may
elect and are in addition to its rights and remedies at law or equity. No
delay or omission of the Bank to exercise any right, remedy, or power shall
impair the same or be construed to be a waiver of any Event of Default or an
acquiescence therein. No waiver of any Event of Default shall extend to or
affect any subsequent Event of Default or shall impair any rights, remedies, or
powers available to the Bank. No single or partial exercise of any right,
remedy, or power shall preclude other or further exercise thereof by the Bank.
Section 10.04 Cost of Collection. The Borrower agrees that if
default shall be made in the payment of the principal of or interest on any of
the Notes, when the same shall become due and payable, they will pay to the
Bank such additional amount as shall be sufficient to cover the cost and
expenses of collection, including reasonable attorneys' fees, and any expenses
or liabilities incurred by the Bank in the collection thereof.
Section 10.05 No Advances; Conversions, etc. The Bank shall not be
required to make any Advances under this Credit Agreement or Convert all or any
part of the Revolving Loan to a Term Loan if a Possible Default or an Event of
Default has occurred and is continuing.
ARTICLE XI
MANAGEMENT AND COLLECTION OF COLLATERAL
Section 11.01 Status of Investments and Other Collateral. With
respect to Collateral at the time the Collateral becomes subject to the Bank's
Lien, the Borrower covenants, represents and warrants: (a) the Borrower shall
be the sole owner, free and clear of all Liens except in favor of the Bank or
otherwise permitted hereunder, of and fully authorized to sell, transfer,
pledge and/or grant a security interest in each and every item of said
Collateral, except as such authorization may be limited by applicable
securities laws or limitations set forth in the documents evidencing or
securing the Investments of the Borrower; (b)(i) to the best of Borrower's
knowledge, each promissory note, instrument, bond, debenture or other
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document or agreement evidencing or securing any indebtedness of a Person to
the Borrower and comprising an Investment of the Borrower (hereinafter
collectively referred to as the "Debt Instruments") shall be a good and valid
obligation representing an undisputed bona fide indebtedness incurred or an
amount indisputably owed by the Person therein named, for the amount set forth
therein; (ii) each mortgage, deed of trust, financing statement and other
recorded security document comprising a Debt Instrument shall be duly recorded
and all liens and security interests created thereby shall be duly perfected;
and (iii) adequate title insurance and, to the extent Borrower has the right to
require and cause the same to be maintained, adequate fire and extended
coverage insurance shall be obtained and shall be maintained with respect to
all real property and improvements thereon encumbered by Debt Instrument; (c)
to the best of Borrower's knowledge, no Debt Instrument is or shall be subject
to any defense, offset or counterclaim, and each Debt Instrument shall be
payable when stated to be due; (d) to the best of Borrower's knowledge, each
Investment which is a share of capital stock in a Person or an option, warrant,
or other right to acquire or convert property to capital stock of a Person or a
limited or general partnership interest in a Person (hereinafter collectively
referred to as "Equity Interests") shall be validly issued to the Borrower and
shall represent a legally enforceable equity interest in each such Person
enforceable in accordance with its respective terms; (e) to the best of
Borrower's knowledge, none of the transactions underlying or giving rise to any
Debt Instrument or Equity Interests comprising the Collateral shall violate any
applicable state or federal laws or regulations; (f) to the best knowledge of
the Borrower, each maker of a Debt Instrument comprising the Collateral shall
be solvent and able to pay the Debt Instrument on which it is obligated in full
when due; (g) no agreement under which any deduction or offset of any kind has
been or shall be granted with respect to any Debt Instrument comprising the
Collateral; (h) to the best of Borrower's knowledge, all documents and
agreements relating to Debt Instruments and Equity Interests comprising the
Collateral shall be true and correct and in all respects what they purport to
be; and (i) to the best of the Borrower's knowledge, all signatures and
endorsements that appear on all Debt Instruments and Equity Interests shall be
genuine and all signatories and endorsers shall have full capacity to contract.
Section 11.02 Collection of Receivables, Investments; Management of
Collateral. (a) Until the Borrower's authority to do so is terminated (which
the Bank may do at any time upon the occurrence of an Event of Default), the
Borrower will, at its own cost and expense, use its best efforts to collect and
otherwise enforce as the Bank's property and in trust for the Bank all amounts
payable on
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or otherwise receivable with respect to the Investments of the Borrower and the
Debt Instruments and Equity Interests comprising the Collateral; provided,
however, upon the request of the Bank following the occurrence of an Event of
Default, the Borrower shall take such action (at the Borrower's expense) as
reasonably requested by the Bank to collect any designated Investments
evidenced by Debt Instruments.
The Bank shall have the right from time to time following the
occurrence of an Event of Default (at the Borrower's expense) to arrange for
the verification of all amounts owing under or on account of Debt Instruments
directly with the obligors thereof or by other methods reasonably satisfactory
to the Bank. Any such verification shall be conducted in such a manner as to
minimize disruption to the Borrower's business.
The Borrower shall notify the Bank promptly relating to material
default by any Person liable on a Debt Instrument which represents greater than
$1,000,000.00 or more in the aggregate of the Borrower's Investments or receipt
of any credit or information reflecting any insolvency proceedings under the
Bankruptcy Code, appointment of a creditors' committee, assignment for the
benefit of creditors or other information indicating any basis for doubt that
such Person will pay its obligations to the Borrower in full as the same
becomes due and payable.
The Borrower shall not, without the Bank's prior written consent,
grant any extension of the time of payment of any Debt Instrument or amount due
on account of an Equity Interest, compromise or settle any Debt Instrument for
less than the full amount thereof, release, in whole or in part, any person or
property liable for the payment thereof, or allow any credit or discount
whatsoever thereon except in each instance in the normal course of business
consistent with past practices.
In the event that after the occurrence of any Event of Default the
Borrower shall receive any amounts payable under or in respect to Debt
Instruments or Equity Interests, the Borrower shall receive the same in trust
for the Bank and shall deliver to the Bank (or to a depository designated by
the Bank) in original form and on the date or receipt thereof, all checks,
drafts, notes, money orders, acceptances, cash and other evidences of
indebtedness. The Borrower shall also direct all payments under or pursuant to
its Debt Instruments and Equity Interests to the Bank or its designee.
Section 11.03 Upon Event of Default. Upon the occurrence of an Event
of Default, in addition to each and other right and remedy granted by the
Borrower to the
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Lender in this Credit Agreement or in the Collateral Security Agreements or
other Loan Documents or as otherwise provided at law and in equity, the
Borrower agrees to do all things necessary to perfect title to the Investments,
including, but not limited to, the Debt Instruments and the Equity Interests,
and shall assign and deliver to the Bank or its designee all Debt Instruments
and evidences of Equity Interests, with all requisite endorsements and
assignments in favor of the Bank, (which the Bank may make as attorney-in-fact
for the Borrower, the Bank being hereby appointed as attorney-in-fact for the
Borrower for such purposes), and all of the Borrower's books and records
relating thereto. At and after any Event of Default and while such Event of
Default is continuing, the Bank may send a notice of assignment and/or notice
of the Bank's Lien to any and all Persons liable on Debt Instruments and to all
issuers of Equity Interests or any third party holding or otherwise concerned
with any of the Collateral, and thereafter the Bank shall have the sole right
to collect directly the amounts payable under or related to the Debt
Instruments and the Equity interests.
The Borrower hereby constitutes the Bank or its designee on behalf of
the Bank as the Borrower's attorney-in-fact with power: upon occurrence and
during the continuance of an Event of Default to endorse the Borrower's name
upon any notes, acceptances, checks, drafts, money orders or other evidences of
payment or Collateral that may come into its possession; to take any and all
actions under each Debt Instrument which the holder and beneficiary thereof is
entitled to take thereunder and pursuant thereto, including, but not limited
to, obtaining appropriate insurance or paying taxes that are due and owing if
the Person liable under the Debt Instrument fails to perform the obligations of
such Person set forth in the Debt Instrument (and any such amounts advanced on
account of the Borrower shall constitute part of the Obligations, shall bear
interest at the highest rate of interest then applicable under the Notes, and
shall be payable on demand by the Borrower); upon the occurrence and during the
continuance of an Event of Default, to notify the Postal Service authorities to
change the address for delivery of mail addressed to the Borrower to such
address as the Bank may designate; and to do all other acts and things
necessary to carry out this Agreement. All acts of said attorney or designee
are hereby ratified and approved, and said attorney or designee shall not be
liable for any acts of omission or commission (except to the extent it is
determined by a final judicial decision that the Bank's act or omission
constituted gross negligence or willful misconduct), nor for any error of
judgement or mistake of fact or law; this power being coupled with an interest
is irrevocable until all of the Obligations are paid in full and this Credit
Agreement is terminated.
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The Bank, without notice to or consent of the Borrower, upon the
occurrence and during the continuance of an Event of Default (A) may xxx upon
or otherwise collect, extend the time of payment of, or compromise or settle
for cash, credit or otherwise upon any terms, any of the Debt Instruments or
amounts owing on account of Equity Interests and insurance applicable thereto
and/or release the obligor thereon; and (B) shall have the right to receive,
endorse, assign and/or deliver in its name or the name of the Borrower any and
all checks, drafts and other instruments for the payment of money relating to
the Debt Instruments and Equity Instruments and the Borrower hereby waives
notice of presentment, protest and non-payment of any instrument so endorsed.
Nothing herein contained shall be construed to constitute the Borrower
as agent of the Bank for any purpose whatsoever, and the Bank shall not be
responsible or liable for any shortage, discrepancy, damage, loss or
destruction of any part of the Collateral wherever the same may be located and
regardless of the cause thereof (except to the extent it is determined by a
final judicial decision that the Bank's act or omission constitute gross
negligence or willful misconduct). The Bank shall not, under any circumstances
or in any event whatsoever, have any liability for any error or omission or
delay of any kind occurring in the settlement, collection or payment of any of
the Debt Instruments or any amount relating to the Equity Interests or for any
damage resulting therefrom (except to the extent it is determined by a final
judicial decision that the Bank's act or omission constituted gross negligence
or willful misconduct). The Bank, by anything herein or in any assignment or
otherwise, does not assume any of the Borrower's obligations under any contract
or agreement assigned to the Bank except to the extent the Bank takes action
with respect to any of such obligations in a manner that constitutes gross
negligence or wilful misconduct, and the Bank shall not be responsible in any
way for the performance by the Borrower of any of the terms and conditions
thereof.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Payment of Expenses. If any Taxes shall be payable, or
ruled to be payable, to any state, province or Federal authority, with respect
to the recordation of any Collateral Security Document, or other Loan Document
by reason of any existing or hereafter enacted Federal or state statutes, the
Borrower will pay all such Taxes in accordance with such statutes, including
interest and penalties thereon, excluding Taxes solely on income of the Bank if
any, and will indemnify and hold the
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Bank harmless against any liability in connection therewith. The Borrower will
also reimburse the Bank for the fees and disbursements incurred by Xxxxxxxx,
Xxxx and Xxxxx for their services to the Bank in preparing, reviewing, closing
or enforcing this Credit Agreement and the other documents executed in
connection herewith, and will reimburse the Bank for any out-of-pocket expenses
incurred in connection therewith. The Borrower shall at all times protect,
indemnify, defend and save harmless the Bank from and against any and all
claims, actions, suits and other legal proceedings and liabilities, damages,
costs, interest, charges, counsel fees and other expenses and penalties (the
"Indemnified Liabilities"), which the Bank may, at any time, sustain or incur
by reason or in consequence of or arising out of the execution and delivery of
this Credit Agreement and the consummation of the transactions contemplated
hereby, except for any such Indemnified Liabilities resulting from the gross
negligence or willful misconduct of the Bank. All amounts payable or
reimbursable by the Borrower under this Section 12.01 shall be due and payable
on demand. The obligations imposed upon the Borrower by this Section 12.01
shall survive the payment of the Loans and the Notes.
Section 12.02 Notices. Any notice to or demand upon the Borrower
shall be deemed to have been sufficiently given or served for all purposes
hereof one (1) day after being sent by overnight express courier, three (3)
days after being mailed, certified mail, return receipt requested or, when
received during normal business hours, by electronic facsimile (confirmed by
subsequent delivery of "hard copy"), addressed to the Borrower at 0000 X
Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000, or to such other address as
may be furnished in writing to the Bank for such purpose by the Borrower. Any
notice to or demand upon the Bank shall be deemed to have been sufficiently
given or served for all purposes hereof one (1) day after being sent by
overnight express courier or three (3) days after being mailed, certified mail,
return receipt requested, addressed to the Bank at 0000 Xxxxxxxxxx Xxxxx, Xxxxx
000, XxXxxx, Xxxxxxxx 00000-0000, Attn: Xxxxxx X. Xxxxxxxx, Vice President,
with a copy to Xxxxxxxx, Xxxx and Xxxxx, 0000 X Xxxxxx, X.X., Xxxxx 000,
Xxxxxxxxxx, X.X. 00000, Attn: Xxxxx X. Xxxxxx, Esq., or to such other address
as may be furnished in writing to the Borrower for such purpose by the Bank.
The Borrower agrees that the Bank may rely and act upon, without any
investigation or inquiry as to the authority or power to give, or accuracy or
reasonableness of, and the Borrower will be unconditionally and irrevocably
bound and obligated by, any instructions, notice, request, report or other
communications given by duly elected officers of the Borrower.
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Section 12.03 Survival of Representations and Warranties. All
representations and warranties contained herein shall survive the execution and
delivery of this Credit Agreement, any investigation at any time made by the
Bank, and the execution and delivery of the Notes and shall continue in full
force and effect so long as the Notes are outstanding and unpaid.
Section 12.04 Entire Agreement; Amendment. This Credit Agreement,
including all exhibits hereto, embodies the entire agreement and understanding
between the Borrower and the Bank and supersedes all other prior agreements and
understandings relating to the subject matter hereof. The Borrower and the
Bank may enter into further and additional written agreements to amend or
supplement this Credit Agreement and the terms and provisions of such further
and additional written agreements shall be deemed a part of this Credit
Agreement as though incorporated herein. Except as provided herein, the Bank
has no obligation to make loans or advances to the Borrower.
Section 12.05 Parties in Interest. All the terms and provisions of
this Credit Agreement shall inure to the benefit of and be binding upon and be
enforceable by the respective successors and assigns of the parties hereto,
whether so expressed or not and, in particular, shall inure to the benefit of
and be enforceable by any holder of the Notes. The Borrower shall not assign
its rights under this Credit Agreement without the prior written consent of the
Bank.
Section 12.06 Binding Arbitration. Any controversy or claim between
or among the parties hereto, including but not limited to those arising out of
this instrument, agreement or document or any related instruments, agreements
or documents, including any claim based on or arising from an alleged tort,
shall be determined by binding arbitration in accordance with the Federal
Arbitration Act (or if not applicable, the applicable state law), the rules of
practice and procedure for arbitration of commercial disputes of the Judicial
Arbitration and Mediation Services, Inc. (J.A.M.S.) and the "Special Rules" set
forth below. In the event of an inconsistency, the Special Rules shall
control. Judgment upon any arbitration award may be entered in any court
having jurisdiction. Any party to this instrument, agreement or document may
bring any action, including a summary or expedited proceeding, to compel
arbitration of any controversy or claim to which this instrument, agreement or
document relates in any court having jurisdiction over such action.
(i) Special Rules. The arbitration shall be conducted in the city of
the Borrower's domicile at the time of execution of this instrument, agreement
or document and administered by J.A.M.S. who will appoint an
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arbitrator. If J.A.M.S. is unable or legally precluded from administering the
arbitration, then the American Arbitration Association will serve. All
arbitration hearings will be commenced within ninety (90) days of the demand
for arbitration; further, the arbitrator shall only, upon a showing of cause,
be permitted to extend the commencing of such hearing for an additional sixty
(60) days.
(ii) Reservation of Rights. Nothing in this instrument, agreement or
document shall be deemed to: (i) limit the applicability of any otherwise
applicable statutes of limitation or repose and any waivers contained in this
instrument, agreement or document; or (ii) be a waiver by Bank of the
protection afforded to it by 12 U.S.C. Section 91 or any substantially
equivalent state law; or (iii) limit the right of the Bank: (a) to exercise
self help remedies such as (but not limited to) setoff, or (b) to foreclose
against any real or personal property collateral, or (c) to obtain from a court
provisional or ancillary remedies such as (but not limited to) injunctive
relief, writs of possession or the appointment of a receiver. The Bank may
exercise such self help rights, foreclose upon such property, or obtain such
provisional or ancillary remedies before, during or after the pendency of any
arbitration proceeding brought pursuant to this instrument, agreement or
document. Neither the exercise of self help remedies nor the institution or
maintenance of any action for foreclosure or for provisional or ancillary
remedies shall constitute a waiver of the right of any party, including the
claimant in such action, to arbitrate the merits of the controversy or claim
occasioning resort to such remedies.
Section 12.07 Severability of Provisions. Any provision of this
Credit Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
of this Agreement or affecting the validity or enforceability of such provision
in any other jurisdiction.
Section 12.08 Headings. Article and Section headings used in this
Credit Agreement are for convenience of reference only and are not a part of
this Agreement for any other purpose.
Section 12.09 Governing Law. This Credit Agreement, the Notes and
each other Loan Document are and will be contracts made under the laws of the
District of Columbia (without regard to the laws regarding conflicts of laws)
and together with the rights and obligations of the parties hereunder shall be
construed and enforced in accordance with and governed by the laws of the
District of Columbia.
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Section 12.10 Counterparts. This Credit Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute but one and the
same agreement.
IN WITNESS WHEREOF, the parties have caused this Credit Agreement to
be executed as of the date first above written by their respective
representatives thereunto duly authorized.
ATTEST: BORROWER:
[Corporate Seal] ALLIED CAPITAL CORPORATION
II, a Maryland corporation
/s/ XXXXXX X. XXXXXX By: /s/ XXXXXXX X. XXXXXX
---------------------- ------------------------
Secretary Xxxxxxx X. Xxxxxx
President
BANK:
WITNESS: NATIONSBANK, N.A.
/s/ X. XXXXXXX By:/s/ XXXXXX X. XXXXXXXX(SEAL)
---------------------- ----------------------
Xxxxxx X. Xxxxxxxx
Vice President
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AMENDED AND RESTATED REVOLVING NOTE
$25,000,000.00 September 28, 1995
FOR VALUE RECEIVED, the undersigned, ALLIED CAPITAL CORPORATION II, a
Maryland corporation (the "Borrower"), hereby promises to pay to the order of
NATIONSBANK, N.A. (the "Holder"), at its offices located at 0000 Xxxxxxxxxx
Xxxxx, Xxxxx 000, XxXxxx, Xxxxxxxx 00000-0000, the principal sum of
TWENTY-FIVE MILLION DOLLARS ($25,000,000.00), or, if lesser, the aggregate
unpaid principal amount of the Revolving Loan evidenced by this Note made by
the Holder to the Borrower pursuant to Article II, Part A of the Credit
Agreement (as hereinafter defined). The unpaid principal balance outstanding
on this Note from time to time and interest thereon shall be determined by the
ledgers and records of the Holder as maintained in accordance with the Holder's
ordinary practices.
This Note is the Revolving Note defined and referred to in, and is
entitled to the benefits of, a certain Amended and Restated Credit Agreement
dated as of September 28, 1995, by and between the Borrower and the Holder
(said Amended and Restated Credit Agreement, as it may be from time to time
amended, restated, or otherwise modified, being herein called the "Credit
Agreement"). Reference is made to the Credit Agreement for a statement of the
rights of the Holder and the duties and obligations of the Borrower in relation
thereto, but neither this reference to the Credit Agreement nor any provision
thereof shall affect or impair the absolute and unconditional obligation of the
Borrower to pay the principal of and interest on this Note when due.
Capitalized terms used in this Note but not defined herein shall have the
respective meanings ascribed to them in the Credit Agreement.
The principal of this Note shall be due and payable in full on May 31,
1997, or earlier as provided in the Credit Agreement.
The Borrower also promises to pay interest on the unpaid principal
amount of this Note from time to time outstanding from the date of this Note
until the payment in full thereof at the rate equal to the "Libor Rate" plus
one hundred fifteen (115) basis points. As used herein, the term "Libor Rate"
means, with respect to any Interest Period, a rate per annum equal to the
quotient obtained (rounded upwards, if necessary, to the next highest 1/16 of
1%) by dividing (i) the rate of interest determined by the Holder two (2)
Business Days prior to the first day of such Interest Period that it would have
to pay at 11:00 a.m. London time in the London inter-bank market for inter-bank
deposits of United States Dollars with a maturity approximately equal to the
Interest Period selected by the
62
Borrower pursuant to the terms of the Credit Agreement for the use of such rate
in determining the interest to be charged on the outstanding principal balance
of this Note by (ii) 1.00 minus for any day that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
reserve requirement for the Holder in respect of "Eurocurrency liabilities" (or
in respect of any other category of liabilities which includes deposits by
reference to which the Libor Rate is determined).
Interest shall be payable on each date provided for in or determined
in accordance with the provisions of the Credit Agreement. Interest shall be
calculated on the basis of a 360 day year for the actual number of days
elapsed.
Reference is hereby made to the Credit Agreement, which contains
provisions for the acceleration of the maturity hereof upon the happening of
certain stated events and for voluntary prepayments hereon. The term "Holder"
includes the successors and assigns, if any, of the Holder named in the first
paragraph hereof.
All payments of principal of and interest in this Note shall be made
in lawful money of the United States of America and in immediately available
funds.
The Borrower waives demand, presentment for payment, notice of
dishonor, protest, notice of protest, and diligence in collection and bringing
suit, and agrees that Holder may extend the time for payment, accept partial
payment, take security therefor or exchange or release any collateral, without
discharging or releasing the Borrower.
The construction, validity and enforceability of this Note shall be
governed by the laws of the District of Columbia.
Any controversy or claim between or among the parties hereto,
including but not limited to those arising out of this instrument, agreement or
document or any related instruments, agreements or documents, including any
claim based on or arising from an alleged tort, shall be determined by binding
arbitration in accordance with the Federal Arbitration Act (or if not
applicable, the applicable state law), the rules of practice and procedure for
arbitration of commercial disputes of the Judicial Arbitration and Mediation
Services, Inc. (J.A.M.S.) and the "Special Rules" set forth below. In the
event of an inconsistency, the Special Rules shall control. Judgment upon any
arbitration award may be entered in any court having jurisdiction. Any party
to this instrument, agreement or document may bring any action, including a
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summary or expedited proceeding, to compel arbitration of any controversy or
claim to which this instrument, agreement or document relates in any court
having jurisdiction over such action.
(i) Special Rules. The arbitration shall be conducted in the
city of Borrower's domicile at the time of execution of this instrument,
agreement or document and administered by J.A.M.S. who will appoint an
arbitrator. If J.A.M.S. is unable or legally precluded from administering the
arbitration, then the American Arbitration Association will serve. All
arbitration hearings will be commenced within ninety (90) days of the demand
for arbitration; further, the arbitrator shall only, upon a showing of cause,
be permitted to extend the commencing of such hearing for an additional sixty
(60) days.
(ii) Reservation of Rights. Nothing in this instrument,
agreement or document shall be deemed to: (i) limit the applicability of any
otherwise applicable statutes of limitation or repose and any waivers contained
in this instrument, agreement or document; or (ii) be a waiver by the Holder of
the protection afforded to it by 12 U.S.C. Section 91 or any substantially
equivalent state law; or (iii) limit the right of the Holder: (a) to exercise
self help remedies such as (but not limited to) setoff, or (b) to foreclose
against any real or personal property collateral, or (c) to obtain from a court
provisional or ancillary remedies such as (but not limited to) injunctive
relief, writs of possession or the appointment of a receiver. The Holder may
exercise such self help rights, foreclose upon such property, or obtain such
provisional or ancillary remedies before, during or after the pendency of any
arbitration proceeding brought pursuant to this instrument, agreement or
document. Neither the exercise of self help remedies nor the institution or
maintenance of any action for foreclosure or for provisional or ancillary
remedies shall constitute a waiver of the right of any party, including the
claimant in such action, to arbitrate the merits of the controversy or claim
occasioning resort to such remedies.
ATTEST: ALLIED CAPITAL CORPORATION II,
a Maryland corporation
[Corporate Seal]
/s/ XXXXXX X. XXXXXX By:/s/ XXXXXXX X. XXXXXX (SEAL)
----------------------- ---------------------
Secretary Xxxxxxx X. Xxxxxx
President
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