EXHIBIT 4.3
Execution Copy
===============================================================================
----------------------------------------
REIMBURSEMENT AGREEMENT
----------------------------------------
by and between
LabOne, Inc., a Delaware corporation
and
Commerce Bank, N.A.
Relating to
$20,000,000
City of Lenexa, Kansas
Taxable Industrial Revenue Bonds
(LabOne, Inc. Project)
Series 1998A
Dated as of September 1, 1998
===============================================================================
TABLE OF CONTENTS
Page
Section 1. Certain Defined Terms.................................2
Section 2. Issuance of the Letter of Credit; Conditions
Precedent to Issuance of the Letter of Credit.......6
(a) Issuance of the Letter of Credit: Substitute
Letters of Credit ...................................7
(b) Conditions Precedent to the Issuance of the Letter
of Credit............................................7
Section 3. Reimbursement and Other Payments.....................10
(a) Reimbursement.......................................10
(b) Commissions and Fees................................12
(c) Increased Costs.....................................12
(d) Pledge of Bonds.....................................13
(e) Release of Pledged Bonds............................13
(f) Reinstatement of Letter of Credit...................13
(g) Payments on Pledged Bonds...........................14
(h) Payments and Computation of Payments and Interest...14
(i) Conversion of Interest Rate Mode to Semiannual Mode,
Annual Mode or a Multi-Year Mode....................14
Section 4. Obligations Absolute.................................15
Section 5. Representations and Warranties.......................15
(a) Status..............................................16
(b) Power and Authority.................................16
(c) Compliance with Other Instruments...................16
(d) Litigation..........................................16
(e) Governmental Approvals..............................17
(g) Federal Reserve Margin Regulations..................17
(h) Environmental Representations.......................17
(i) ERISA...............................................19
(j) Investment Company Act..............................19
(k) Taxes...............................................19
(l) Intellectual Property...............................19
(m) Accuracy of Information.............................19
(n) Related Documents...................................20
Section 6. Covenants............................................20
(a) Financial Reports...................................20
(b) Payment of Charges..................................21
(c) Insurance...........................................21
(d) Inspection of Books and Assets, Confidentiality.....21
i
(e) Notices.............................................21
(f) Litigation..........................................21
(g) Preservation of Existence, Compliance with Laws.....22
(h) Environmental Laws..................................22
(i) ERISA...............................................22
(j) Liens...............................................23
(k) Financial Covenants of Company......................24
(l) Principal Operating Accounts........................25
(m) Amendment of Related Documents......................25
(n) Registration of Bonds...............................25
(o) Optional Redemption.................................25
(p) Indenture, Etc......................................25
(q) Sale of Subordinate Bonds...........................25
(r) Disbursement of Project Funds.......................26
(s) Environmental Report Compliance and Update..........26
Section 7. Events of Default....................................26
Section 8. Amendments, Etc......................................28
Section 9. Notices..............................................28
Section 10. No Waiver; Remedies.................................29
Section 11. Right of Setoff.....................................29
Section 12. Indemnification.....................................29
Section 13. Continuing Obligation...............................30
Section 14. Transfer of Letter of Credit; Reduction of Stated
Amount..............................................30
Section 15. Limitations on Bank Liability.......................30
Section 16. Costs, Expenses and Taxes...........................31
Section 17. Severability........................................31
Section 18. Governing Law.......................................31
Section 19. Substitute Letter of Credit Issuing Office..........31
Section 20. Headings............................................32
Section 21. Accounting Terms and Definitions....................32
ii
Section 22. Counterparts........................................32
Section 23. Bank Consent........................................32
Section 24. Year 2000 Compliance................................32
Section 25. Waiver of Jury Trial................................32
Section 26. Statements Required by Law..........................33
iii
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT is made as of September 1, 1998 by and
between LabOne, Inc., a Delaware corporation, with its principal office at 00000
Xxxx 00xx Xxxxxxx, Xxxxxx, Xxxxxx 00000 (the "Company"), and COMMERCE BANK,
N.A., with its principal office at 0000 Xxxxxx 00xx Xxxxx, Xxxxxx Xxxx, Xxxxxxxx
00000 (the "Bank").
RECITALS
WHEREAS, The City of Lenexa, Kansas, and its successors and assigns
(the "Issuer") has agreed to issue its Taxable Industrial Revenue Bonds (LabOne,
Inc., Project) Series 0000X (xxx "Xxxxx") in the principal amount of $20,000,000
pursuant to a Trust Indenture dated as of September 1, 1998 (the "Indenture"),
between the Issuer and Intrust Bank, N.A., as Trustee (the "Trustee"), to
finance the acquisition, construction and equipping of an approximate 250,000
square foot office lab and warehouse facility located near Kansas highway K-10
and Interstate I-435 on Xxxxxx Road in Xxxxxxx County, Kansas (the "Project"),
pursuant to a Lease Agreement dated as of September 1, 1998 (the "Lease
Agreement"), between Issuer and the Company; and
WHEREAS, the Bonds are to be payable from payments in amounts
sufficient to pay the principal of and interest on the Bonds (the "Lease
Payments") to be made by the Company pursuant to the Lease Agreement; and
WHEREAS, the Remarketing Agent (as hereinafter defined) has agreed to
remarket from time to time the Bonds tendered for purchase on tender dates as
provided in the Indenture; and
WHEREAS, as a condition to the use of the proceeds of the Bonds for
the purpose of financing the Project, the Issuer has required the Company to
obtain an irrevocable direct pay letter of credit from the Bank (the "Letter of
Credit"), listing the Trustee as the beneficiary thereunder, in the initial
Stated Amount of Twenty Million Three Hundred Eighty Thousand Dollars
($20,380,000) (as the same may be reduced from time to time as provided
therein), of which up to $20,000,000 in the aggregate may be drawn upon in
respect of principal of the Bonds when due upon maturity, redemption or
acceleration, or with respect to the principal component of the Purchase Price
of the Bonds upon any optional or mandatory tender, and $380,000 in the
aggregate may be drawn upon in respect of interest on the Bonds, or the interest
component of the Purchase Price of the Bonds upon any optional or mandatory
tender; and
WHEREAS, as a condition to the Bank's undertaking the obligations
under the Letter of Credit, the Bank has required that the Company deliver to
the Bank: (i) this Reimbursement Agreement obligating the Company to reimburse
the Bank for any amounts drawn by the Trustee on the Letter of Credit; (ii) the
Pledge and Security Agreement (as such term is hereinafter defined); (iii) the
Security Agreement (the "Security Agreement") dated as of September 1, 1998
wherein the Company grants the Bank a security interest in the Project; (iv) a
letter (the "Comfort Letter") from Lab Holdings, Inc.
("Holdings") regarding Holdings'
awareness of this transaction and all Related Documents and Holdings' agreement
to provide its reasonable efforts in assisting Company to fully comply with the
terms of this Agreement and all Related Documents; and (v) such other security
documents executed and delivered in connection with this Reimbursement Agreement
(collectively the documents referred to in this recital may at times be referred
to as the "Security Documents").
NOW, THEREFORE, in consideration of the premises and in order to
induce the Bank to issue the Letter of Credit, the Company and the Bank hereby
agree as follows:
Section 1..Certain Defined Terms. As used in this Agreement and unless otherwise
expressly indicated, or unless the context clearly requires otherwise, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"A Drawing" means a demand for payment under the Letter of Credit made by
presentation of a document in the form of Exhibit A (Same Day Purchase) thereto.
"Agreement" means this Reimbursement Agreement, as the same from time to
time may be amended or supplemented.
"Authorized Denominations" means the denominations of the Bonds as
authorized in Section 203 of the Indenture.
"B Drawing" means a demand for payment under the Letter of Credit made by
presentation of a document in the form of Exhibit B (Principal) thereto.
"Bond" or "Bonds" means individually or collectively, as appropriate one
or more Taxable Industrial Revenue Bonds (LabOne, Inc. Project), Series 1998A
issued under the Indenture by The City of Lenexa, Kansas.
"Bond Counsel" shall have the meaning ascribed to it in the Indenture.
"Bond Purchase Agreement" means the Bond Purchase Agreement among the
Issuer, the Underwriter and the Company.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii) a
day on which banking institutions in the city in which the principal corporate
trust office of the Trustee, the Tender Agent and the Remarketing Agent or the
office of the Bank at which demands for payment under the Letter of Credit are
to be presented, are required or authorized by law to close, or (iii) a day on
which the New York Stock Exchange is closed.
"C Drawing" means a demand for payment under the Letter of Credit made by
presentation of a document in the form of Exhibit C (Interest) thereto.
"Code" means the Internal Revenue Code of 1986, as amended.
2
"Comfort Letter" has the meaning assigned to that term in the recitals
to this Agreement.
"Date of Issuance" has the meaning assigned to that term in Section 3(b)
of this Agreement.
"D Drawing" means a demand for payment under the Letter of Credit made by
presentation of a document in the form of Exhibit D (Acceleration) thereto.
"Default" means any event or condition which with the giving of notice or
the lapse of time or both would, unless cured or waived, become an Event of
Default.
"Environmental Laws" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. xx.xx. 960, et
seq., the Hazardous Materials Transportation Act, 49 U.S.C. xx.xx. 1801, et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. xx.xx. 6901, et
seq., the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. xx.xx.
2601, et seq., the Clean Water Act, 33 U.S.C. xx.xx. 1251-1387, as amended, the
Clean Air Act, 42 U.S.C. xx.xx. 7401, et seq., as amended, and the Occupational
Safety and Health Act of 1970, as amended, 29 U.S.C. xx.xx. 651, et seq., as any
of the foregoing may be amended, any rule or regulation promulgated thereunder
or issued pursuant thereto, and any other present or future and all state,
federal and local environmental, health and safety statutes, ordinances, rules,
permit conditions, regulations, orders or directives addressing environmental,
health or safety issues and rules of common law and any amendments to any of the
foregoing.
"Environmental Report" means the Report of Phase II Environmental
Investigation to the Company from Kingston dated August 14, 1997.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended or any successor statute.
"Event of Default" has the meaning assigned to that term in Section 7 of
this Agreement.
"Expiration Date" has the meaning assigned to that term in Section 2(a)
of this Agreement.
"GAAP" means generally accepted accounting principles as in effect on the
date hereof. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP.
"Hazardous Materials" means (i) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, and transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls; (ii)
any chemicals, materials or substances defined as or included in the definition
of "hazardous substances," "hazardous wastes," "hazardous materials," "extremely
hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," or words of similar import, under any applicable Environmental Law.
3
"Holdings" means Lab Holdings, Inc., a Missouri corporation.
"Indebtedness" means, with respect to any Person, (a) indebtedness for
borrowed money (other than trade payables) or for the deferred purchase price of
property or services in respect of which such Person is liable, contingently or
otherwise, as obligor or otherwise, or any commitment by which such Person
assures a creditor against loss, including contingent reimbursement obligations
with respect to letters of credit, (b) any indebtedness described in clause (a)
which is guaranteed in any manner by such Person, including guarantees in the
form of an agreement to repurchase or reimburse, (c) obligations under leases
which shall have been or should be, in accordance with GAAP, recorded as capital
leases, in respect of which obligations such Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which
obligations such Person assures a creditor against loss, including, without
limitation, payments related to the Bonds pursuant to the Lease Agreement, but
specifically excluding payments related to the Subordinated Bonds pursuant to
the Lease Agreement, and (d) any unfunded obligations of such Person to any
benefit plan or multiemployer plan.
"Indenture" means the Trust Indenture referred to in the first recital
clause of this Agreement.
"Independent Architect" means such architect, engineer or firm of
architects or engineers selected by the Company and licensed by, or permitted to
practice in, the State, which architect, engineer or firm of architects or
engineers shall have no interest, direct or indirect, in the Company and, in the
case of an individual, shall not be a director, officer or employee of the
Company and, in the case of a firm, shall not have a partner, member, director,
officer or employee who is a director, officer or employee of the Company; it
being understood that an arm's-length contract with the Company for the
performance of architectural or engineering services shall not in and of itself
be regarded as creating an interest in or an employee relationship with such
entity and that the term Independent Architect may include an architect or
engineer or a firm of architects or engineers who otherwise meet the
requirements of this definition and who also are under contract to construct the
facility that they have designed.
"Interest Payment Date" has the meaning assigned to that term in the
Indenture.
"Issuer" has the meaning assigned to that term in the first recital clause
of this Agreement.
"Kingston" means Kinston Environmental Services, the entity retained to
prepare the Environmental Report.
"Lease Agreement" has the meaning assigned to that term in the first
recital clause of this Agreement.
"Letter of Credit" has the meaning assigned to that term in the fourth
recital clause of this Agreement.
4
"Net Worth" has the meaning assigned to that term in Section 6(k) of this
Agreement.
"Official Statement" means the Official Statement dated September 4, 1998,
used by the Underwriter in connection with the sale of the Bonds.
"Ordinary Course of Business" means the Company's ordinary course of
business, including, without limitation, laboratory testing, risk assessment and
substance abuse testing and the acquisition of businesses engaged in one or more
of the lines of business of the Company.
"Outstanding" has the meaning assigned to that term in the Indenture.
"Paying Agent" has the meaning assigned to that term in the Indenture.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a firm, a corporation, a partnership, an
association, a limited liability company, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Pledge and Security Agreement" means the Pledge and Security Agreement
dated as of September 1, 1998, executed by Company and Bank.
"Pledged Bonds" has the meaning assigned to that term in Section 3(d) of
this Agreement.
"Prime Rate" for any day shall mean the per annum rate of interest for
such day announced by the Bank from time to time as its base rate or equivalent
rate, with any change in such prime rate or equivalent to be effective on the
date of such change, it being understood that such rate may not be the best,
most favorable or lowest rate offered by the Bank.
"Project" has the meaning assigned to that term in the Indenture.
"Project Costs" has the meaning assigned to that term in the Indenture.
"Project Funds" has the meaning assigned to that term in the Indenture.
"Property" or "Properties" means any real property owned or leased at
any time by the Company.
"Purchase Price" means, with respect to a Bond, the amount of principal
and accrued interest, if any, necessary to purchase such Bond in accordance with
Sections 306 or 307 of the Indenture.
5
"Related Documents" means this Agreement, the Letter of Credit, the Pledge
and Security Agreement, the Security Agreement, the Bonds, the Indenture, the
Lease Agreement, the Bond Purchase Agreement, the Remarketing Agreement, the
Preliminary Official Statement, the Official Statement, the Security Documents,
and any other document, agreement or instrument relating thereto.
"Remarketing Agent" means Xxxxxx X. Xxxx & Company, and any other
remarketing agent appointed in accordance with the provisions of the Indenture,
and their respective successors and assigns.
"Remarketing Agreement" means the Remarketing Agreement dated as of
September 1, 1998 between the Company and the Remarketing Agent, as the same may
be amended or supplemented from time to time, and any remarketing agreement
between the Company and a successor Remarketing Agent.
"Security Agreement" has the meaning assigned to that term in the fifth
recital clause of this Agreement.
"Security Documents" has the meaning assigned to that term in the fifth
recital clause of this Agreement.
"State" means the State of Kansas.
"Stated Amount" means the aggregate amount that at such time may be
demanded under the Letter of Credit, subject to reduction or increase as
provided therein.
"Subordinate Bonds" means those certain Taxable Industrial Revenue Bonds
(LabOne, Inc. Project), Series 1998B and Series 1998C in an aggregate amount of
$13,000,000 that Company has requested the Issuer to issue and that Company will
purchase.
"Tangible Net Worth" has the meaning assigned to that term in Section 6(k)
of this Agreement.
"Termination Date" has the meaning assigned to that term in Section 3(b)
of this Agreement.
"Trustee" has the meaning assigned to that term in the first recital
clause of this Agreement.
"Underwriter" means Xxxxxx X. Xxxx & Company and their successors and
assigns.
"Written Request" has the meaning assigned to that term in the Indenture.
Section 2..Issuance of the Letter of Credit; Conditions Precedent to
Issuance of the Letter of Credit
6
(a) Issuance of the Letter of Credit: Substitute Letters of Credit.
(i) Subject to the terms and conditions of this Agreement, the
Bank agrees to issue the Letter of Credit on the Date of Issuance in
the form of Annex I hereto, to expire initially on October 5, 2001
(such date, as it may be extended pursuant to clause (ii) of this
Section 2(a) (the "Expiration Date").
(ii) The Company must provide to the Bank written notice of
Company's request to extend the Expiration Date (a "Notice Request")
at least 485 days prior to the Expiration Date, if Company desires the
Bank to extend the Expiration Date of the Letter of Credit by issuing
an amendment to the Letter of Credit, extending the Expiration Date
for a twelve (12) month period. In accordance with Section 2(a)(iii)
Bank will within 60 days after its receipt of the Notice Request
determine whether Bank will extend the Expiration Date for a period of
twelve months.
(iii) The Bank shall not be required to issue any amendment or
substitute letter of credit to extend the then Expiration Date of the
Letter of Credit and only an appropriate writing signed by the Bank
and received by the Trustee shall constitute an amendment or
substitute letter of credit. In the event the Bank upon the written
request of Company, amends the Letter of Credit or issues a substitute
letter of credit for the purpose of extending the Expiration Date, the
amendment shall be effective, or the substitute letter of credit shall
be issued to be effective, on the date of delivery thereof to the
Trustee, and the terms and conditions, fees and commissions, as
provided in this Agreement shall apply to such amended Letter of
Credit or substitute letter of credit, except as then otherwise agreed
in writing by the Company and the Bank. In the event the Bank in its
sole discretion determines not to amend the Letter of Credit or issue
a substitute letter of credit, the Bank will give the Company and the
Trustee notice that it has determined not to amend the letter of
credit or to issue a substitute letter of credit ("Notice of
Non-Renewal") within sixty (60) days of the Bank's receipt of the
Notice Request.
(iv) The Company may exercise any right it otherwise may have
under the Indenture or the Lease Agreement to obtain an alternate or
substitute letter of credit or credit support facility from a
financial institution other than the Bank at any time, subject to the
obligation of the Company to pay the balance of the annual issuance
fee due the Bank if such right is exercised prior to October 1, 1999,
as provided in Section 3(b) hereof.
(b) Conditions Precedent to the Issuance of the Letter of Credit. The
obligation of the Bank to issue the Letter of Credit is subject to the
following conditions precedent:
7
(i) The Bank shall have received on or before the Date of
Issuance the following, each dated the Date of Issuance, in form and
substance satisfactory to the Bank:
(1) this Agreement and all Security Documents duly executed
by the Company;
(2) certified articles of incorporation and good standing
certificate of the Company, certified no earlier than 15 days
prior to the Date of Issuance by the Kansas and Delaware
Secretaries of State;
(3) a copy of the resolutions of the Board of Directors of
the Company, certified by the Secretary or an Assistant Secretary
of the Company (which certificates shall state that such
resolutions are in full force and effect on the Date of
Issuance), authorizing the execution, delivery and performance of
the Related Documents to which the Company is a party and any
other documents as Bank may require to evidence Company's
authority to execute, deliver and perform this Agreement and the
transactions contemplated hereby;
(4) a certificate of the Secretary or Assistant Secretary of
the Company certifying the names and true signatures of the
officers of the Company authorized to sign the documents;
(5) an opinion of counsel to the Company as to such matters
as the Bank may reasonably request, which opinion shall be
satisfactory to the Bank in form and substance;
(6) an opinion of Bond Counsel as to such matters as the
Bank may reasonably request, which opinion shall be satisfactory
to the Bank in form and substance;
(7) an executed copy (or a duplicate thereof) of the Lease
Agreement;
(8) an executed copy (or a duplicate thereof) of the
Indenture;
(9) an executed copy (or a duplicate thereof) of the
Remarketing Agreement;
(10) certified copies of the resolution or resolutions of
the Issuer authorizing the execution and delivery of, and
performance by the Issuer under, the Indenture, the Lease
Agreement and the other Related Documents to which the Issuer is
a party;
8
(11) a copy of the Preliminary Official Statement and an
executed copy of the Official Statement;
(12) evidence of rating of the Bonds by Standard & Poor's
Ratings Group acceptable to the Bank;
(13) a certificate of an authorized officer of the Trustee
dated the Date of Issuance, certifying inter alia the names and
the signatures of the officers of the Trustee authorized to
execute the Indenture and permitting Bank to rely on the
Trustee's Certificate required under the Bond Purchase Agreement;
(14) evidence of zoning and a copy of construction permits
(for the Project);
(15) final plans and specifications for the Project;
(16) a Project budget, architect's contract and construction
contract;
(17) Owner's title insurance policy in favor of the Issuer
and in favor of the Bank and the Trustee, as their interests may
appear, containing no exceptions as to mechanic's liens and
survey;
(18) the Environmental Report;
(19) evidence satisfactory to the Bank (which may include
the survey and surveyor's certification) that the Project does
not lie within a flood plain or an area designated as wetlands
or, in the Bank's sole judgment, has adequate flood insurance;
(20) receipts from the initial purchasers of the Bonds and
the Subordinate Bonds evidencing their delivery;
(21) insurance certificates reflecting Builder's Risk,
general liability, property and worker's compensation insurance
coverages in form and amount and with such companies as are
approved by the Bank;
(22) an executed copy of the Comfort Letter; and
(23) such other documents, instruments, approvals (and, if
requested by the Bank, certified duplicates of executed copies
thereof) or opinions as the Bank may reasonably request, and such
matters as are provided in the proposal letter of Bank to Company
dated May 21, 1998 (the "Proposal Letter").
9
(ii) The following statements shall be true and correct on the
Date of Issuance and the Bank shall have received certificates signed
by duly authorized officers of the participants, dated the Date of
Issuance, stating that:
(1) the representations and warranties made by the Company
contained in Section 5 of this Agreement and in any other Related
Document to which the Company is a party or in any other writing
or instrument issued in connection herewith or therewith, are
true and correct on and as of the Date of Issuance as though made
on and as of such date; and
(2) no Default or Event of Default has occurred and is
continuing, or would result from the issuance of the Letter of
Credit.
(iii) on or before the Date of Issuance:
(1) this Agreement and the Related Documents shall be in
full force and effect;
(2) all conditions precedent to the issuance of the Bonds
shall have occurred; and
(3) the Issuer shall have duly executed, issued and
delivered all of the Bonds pursuant to the Indenture and all of
the Bonds shall have been placed pursuant to the Bond Purchase
Agreement.
(iv) The Company shall have paid to the Bank the fees provided
for in Section 3(b) hereof.
Section 3..Reimbursement and Other Payments.
(a) Reimbursement. The Company hereby agrees:
(i) to pay to the Bank immediately and without demand, not later
than 2:00 p.m. (Kansas City time) two business days prior to the date
any payment is to be made under the Letter of Credit, pursuant to any
"B Drawing", any "C Drawing" or any "D Drawing", to pay the principal
of or interest on the Bonds, as the case may be, and not later than
2:00 p.m. (Kansas City time) on the date any drawing is made under the
Letter of Credit pursuant to any "A Drawing," in all cases such
payment to the Bank to be the amount which the Bank advises the
Company is an amount equal to the full amount paid or expected to be
paid under the Letter of Credit; provided, however,
notwithstanding the foregoing any amount payable with respect to an "A
Drawing" shall be payable to the Bank as follows:
(1) Interest on such amount shall be payable at the interest
rate set forth in Section 3(a)(iii) hereof and shall be payable
at the
10
same time interest on the Bonds is due and payable under the
Indenture, and such payment shall constitute full payment of the
interest due on Pledged Bonds; and
(2) The principal of such Pledged Bonds shall be due on the
Termination Date.
(ii) to pay to the Bank on demand any and all charges and
expenses that the Bank may pay or incur relative to the Letter of
Credit, including without limitation, the costs, expenses, fees and
taxes referred to in Sections 3(c), 12 and 16 hereof;
(iii) to pay to the Bank on demand interest on any and all
amounts required to be paid from and after the due date of payments as
provided in Sections 3(a)(i), 3(a)(ii), 3(a)(iv), 3(b), 3(c), 12 and
16; and until payment is made in full, at a fluctuating per annum
interest rate equal to the Prime Rate plus three percent (3%); and
(iv) to pay to the Bank on the first day of each month commencing
October 1, 1998, an amount equal to one-twelfth (1/12th) of the annual
amount of principal next due on the Bonds pursuant to Section
302(g)(i) of the Indenture, such amount shall be held by the Bank in a
segregated trust account as security for all amounts due hereunder.
All amounts held in such account shall be invested in a U.S.
Government money market account or such other investment acceptable to
the Bank and the Company and interest on such amounts shall accrue to
such account until the amount deposited therein is applied as set
forth in this subparagraph. The Company hereby instructs the Bank to
apply the amounts on deposit in said account to immediately reimburse
the Bank for amounts due under Section 3(a)(i) hereof in the following
order of priority: (1) first, with respect to payment for Pledged
Bonds which are subject to mandatory redemption pursuant to Section
302(g)(i) of the Indenture, payable by the Bank to the Trustee for
deposit in the Bond Fund to be disbursed by the Trustee in accordance
with the Indenture to redeem said Pledged Bonds, (2) second, to
satisfy amounts owing by the Company to the Bank hereunder with
respect to any "B Drawing," and (3) third, to satisfy amounts owing by
the Company to the Bank hereunder with respect to any "C Drawing,"
made in connection with a "B Drawing". In no event shall the Bank use
any moneys in said account to honor draws under the Letter of Credit.
The Bank shall provide the Company with statements with respect to
such account on at least a quarterly basis.
The Company's payment obligations under this Section 3 shall survive the
termination of this Agreement.
(b) Commissions and Fees. The Company agrees to pay the Bank (i) an
origination fee payable on the Date of Issuance of $-0-, (ii) an annual
issuance fee, payable on the Date of Issuance (prorated through September
30, 1998) and thereafter
11
Quarterly in advance on the first day of each quarter commencing with
October 1, 1998, or the next succeeding Business Day thereafter if any such
day is not a Business Day, computed at the rate of .60 of one percent
(.60%) per annum of the Stated Amount from time to time available to be
drawn under the Letter of Credit (plus the amount of any "C Drawing" which
is automatically reinstatable under the Letter of Credit prior to such
reinstatement) from and including the Date on which the Letter of Credit is
issued (the "Date of Issuance") until the last day a drawing is available
under the Letter of Credit (the "Termination Date"), provided, that, if the
Termination Date occurs prior to October 1, 1999 by reason of the Company
having obtained an alternate letter of credit or substitute letter of
credit or credit support facility to credit enhance the Bonds prior to
October 1, 1999, the Company will pay the Bank on the Termination Date the
balance of the annual issuance fee for the period October 1, 1998 through
October 1, 1999, (iii) a negotiation fee of $150 upon each date of Drawing
under the Letter of Credit, and (iv) a sum equal to $500 upon each transfer
of the Letter of Credit in accordance with its terms.
(c) Increased Costs. If the Bank reasonably determines that the
introduction of, change in, or change in the interpretation or application
of, any law, rule, regulation or directive by any court or administrative
or governmental authority charged with the administration thereof shall
either (i) impose, modify or deem applicable any taxation, reserve,
assessment, special deposit or other requirement with respect to letters of
credit issued by, or with respect to any other extension of credit by, or
assets held by, or deposits in or other liabilities for the account of, the
Bank or (ii) impose on the Bank any other condition regarding this
Agreement, the Letter of Credit, or any collateral therefor, or any of the
transactions in the preceding clause (i), or (iii) affect the amount of any
deduction that the Bank may take for purposes of federal, state or local
income taxes in respect of the cost, including, but not limited to,
interest, costs of maintaining the Letter of Credit or the reimbursement
obligations of the Company hereunder, and the result of any event referred
to in clause (i), (ii) or (iii) above shall be to increase the cost, or
diminish the anticipated return, to the Bank of issuing or maintaining the
Letter of Credit or the reimbursement obligations of the Company hereunder,
or reduce the amounts receivable by the Bank hereunder or thereunder (which
increase in cost, diminution in return or reduction of amounts, are
determined by the Bank's reasonable allocation of the aggregate of such
costs, increases, diminution in return, or reductions resulting from such
event, or reduce the rate of return on all or any part of the Bank's
capital as described in the next succeeding sentence, then, upon demand by
the Bank, the Company will immediately pay to the Bank from time to time as
specified by the Bank additional amounts which are sufficient to compensate
the Bank on an after-tax basis for such increased cost, diminution in
return, reduction or loss of profitability from the date of such event
together with interest on such amount from the date demanded until payment
in full at the rate set forth in Section 3(a)(iii) above. If after the date
hereof, the Bank reasonably determines that the introduction of,
implementation of, change in, or change in the interpretation, or
application of, any law, rule, regulation, guideline or directive by any
governmental authority, central bank or other comparable agency charged
with the interpretation or administration thereof, imposes, modifies or
deems applicable any capital adequacy or similar requirement (including
without limitation a
12
request or requirement which affects the manner in which the Bank allocates
capital resources to its commitments, including its obligations hereunder)
and as a result thereof, in the sole opinion of the Bank, the rate of
return on the Bank's capital as a consequence of its obligations hereunder
is reduced to a level below that which the Bank could have achieved but for
such circumstances, then, upon demand by the Bank, the Company shall pay to
the Bank, in the manner described in the preceding sentence, such
additional amount as will compensate the Bank for such reduction in rate of
return. A certificate setting forth such increased cost, diminution in
return, or reduction of amounts or in rate of return incurred by the Bank
as a result of any event mentioned above and giving a reasonable
explanation thereof, submitted by the Bank to the Company (absent error),
shall be conclusive and binding for all purposes. The provisions of this
Section 3(c) shall survive termination of this Agreement.
(d) Pledge of Bonds. As security for the payment of the obligations of
the Company pursuant to Section 3(a) hereof, the Company will pledge to the
Bank, and grant to the Bank a security interest in, its right, title and
interest in and to Bonds delivered to the Bank in connection with "A
Drawings" (herein called "Pledged Bonds"), pursuant to the Pledge and
Security Agreement.
(e) Release of Pledged Bonds. Upon reimbursement of any "A Drawing" in
accordance with Section 3(a)(i) above, together with accrued interest to
the date of such payment on the amount to be paid, the outstanding
obligations of the Company under Section 3(a)(i) above shall be reduced by
the amount of such payment, interest shall cease to accrue on the amount
paid and, upon reinstatement of the Letter of Credit pursuant to Section
3(f) below, the Bank shall release to the Company from the Pledge and
Security Agreement, a principal amount of Pledged Bonds (but only in
Authorized Denominations) held under the Pledge and Security Agreement
corresponding and equal to (or as closely equal as possible without
exceeding the amount of such reimbursement) the principal amount of such
Pledged Bonds included in the "A Drawing" reimbursed by such payment.
(f) Reinstatement of Letter of Credit. (i) Upon receipt by the Bank of
notice from the Remarketing Agent that the Pledged Bonds pledged to the
Bank in connection with an "A Drawing" have been remarketed and the
reimbursement of any amount owing pursuant to Section 3(e) hereof, and
concurrent with the release of the Pledged Bonds as specified therein, the
obligation of the Bank to honor demands for payment of "A Drawings" under
the Letter of Credit will be automatically reinstated to the total
principal amount of the released Bonds plus interest thereon at 12% for 57
days upon issuance of notice of such reinstatement by the Bank to the
Trustee; provided, however, the Bank in its complete and sole discretion
may refuse to release any Pledged Bonds from the pledge and security
interest and may refuse to reinstate the amount thereof as aforesaid if
there shall have occurred and be continuing any Default or Event of
Default.
(i) The obligation of the Bank to honor demands for payment of "C
Drawings" under the Letter of Credit will be automatically reinstated
to the total
13
principal amount of the Bonds Outstanding plus interest thereon at 12%
for 57 days, on the eleventh (11th) business day after the Bank honors
a "C Drawing" made under the Letter of Credit; provided, however, that
the Bank in its complete and sole discretion may refuse to reinstate
the amount of the Letter of Credit as aforesaid by giving notice to
the beneficiary of the Letter of Credit on or before 5:00 p.m., Kansas
City time, on the tenth (10th) business day after the Bank honors such
"C Drawing" that an Event of Default has occurred under this
Reimbursement Agreement and the Bank has declined to reinstate such
amount of the Letter of Credit.
(g) Payments on Pledged Bonds. Payments by the Issuer of
principal or interest due on the Pledged Bonds held pursuant to the
Pledge and Security Agreement, which payments have been received by
the Bank, shall be credited against payments due under Section 3(a)
above. Receipt and application of any such payments, however, shall
not be in satisfaction of, or relieve the Company from, the Company's
payment obligations under Section 3(a) above to the extent of any
deficiency in the amount so received by the Bank.
(h) Payments and Computation of Payments and Interest. All
payments by the Company to the Bank hereunder shall be made in lawful
currency of the United States and in immediately available funds at
the Bank's office set forth in the preamble hereof, or at such other
place as it may designate in writing without any withholding,
deduction or setoff. Funds received after 2:00 p.m., Kansas City Time,
shall be deemed to have been received by the Bank on the following
Business Day, and if any amount payable hereunder shall fall due on a
day that is not a Business Day, then such due date shall be extended
to the next succeeding Business Day. In each such case, interest
and/or fees provided hereunder shall continue to accrue during such
extension. If any payment by the Bank under the Letter of Credit with
respect to a demand for payment by the Trustee thereunder shall be
reimbursed by the Company to the Bank on or before 2:00 p.m. at the
Bank's address as set forth above on the same date such payment is
made by the Bank, no interest shall be payable on the reimbursed
amount. Interest and commission payable hereunder shall be computed on
the basis of a year of 360 days and actual days elapsed. All payments
and other recoveries of money received by the Bank hereunder shall be
applied: FIRST, to the payment of fees, costs, expenses, taxes and
indemnification amounts required hereunder; SECOND, to the payment of
interest as provided herein; and THIRD, to the reimbursement of
amounts drawn under the Letter of Credit.
14
(i) Conversion of Interest Rate Mode to Semiannual Mode,
Annual Mode or a Multi-Year Mode. In the event that Company
elects to change the Interest Rate Mode in accordance with the
Indenture to a Semiannual Mode, Annual Mode or a Multi-Year Mode
and the Bank has approved the changes, and in connection
therewith, the Bank is requested and agrees to increase its
Letter of Credit to provide for additional days interest coverage
under the Indenture or the Lease Agreement, Company agrees to
enter into a modification of this Reimbursement Agreement and any
modifications to any Security Documents to reflect the increased
amount of the indebtedness, as may be reasonably required by
Bank.
Section 4..Obligations Absolute. Except as hereinafter provided, the
obligations of the Company under this Agreement and the Security Documents shall
be absolute, unconditional and irrevocable and shall be paid and performed
strictly in accordance with the terms of this Agreement and the Security
Documents, under all circumstances whatsoever, including, without limitation,
the following circumstances:
(a) any lack of validity or enforceability of the Letter of Credit,
this Agreement, the Bonds, the Indenture, the Lease Agreement, the
Remarketing Agreement or any other Related Document;
(b) any amendment or waiver of, or any consent to or departure from
all or any of the Related Documents which is not consented to in writing by
the Bank;
(c) the existence of any claim, setoff, defense or other rights which
the Company may have at any time against the Trustee, any beneficiary or
any transferee of the Letter of Credit (or any persons or entities for whom
the Trustee, any such beneficiary or any such transferee may be acting),
the Bank, the Remarketing Agent or any other person or entity, whether in
connection with this Agreement, the Related Documents or any unrelated
transaction;
(d) any statement or any other document presented under the Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
whatsoever;
(e) payment by the Bank under the Letter of Credit against
presentation of a draft or certificate which does not comply with the terms
of the Letter of Credit; or
(f) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
Section 5..Representations and Warranties. In order to induce the Bank to
enter into this Agreement and to issue the Letter of Credit pursuant to the
terms hereof, the Company makes the following representations and warranties to
the Bank, all of which shall survive the execution and delivery of this
Agreement:
15
(a) Status. The Company is a duly organized and validly existing
Delaware corporation in good standing and qualified to do business in the
State as a foreign corporation and has the power and authority to own its
property and to transact the business in which it is engaged or presently
proposes to engage and is duly qualified or licensed as a foreign
corporation in good standing in each jurisdiction other than the State in
which such qualification is required, except where the failure to be so
licensed or qualified would not have a material adverse effect on the
Company taken as a whole.
(b) Power and Authority. The Company has the power to execute, deliver
and carry out the terms and provisions of this Agreement and the other
Related Documents to which it is a party and has taken all necessary action
to authorize the execution, delivery and performance of this Agreement and
the other Related Documents to which it is a party and the actions
hereunder and thereunder. This Agreement and the other Related Documents to
which the Company is a party are the legal, valid and binding obligations
of the Company enforceable in accordance with their respective terms,
except as enforcement may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally.
(c) Compliance with Other Instruments. The Company is not in default
under any agreement to which it is a party (other than an agreement related
to a trade payable) which default would materially impair the ability of
the Company to perform its obligations under this Agreement, and neither
the execution, delivery or performance of this Agreement or the other
Related Documents to which the Company is a party nor the consummation of
the transactions herein or therein contemplated, nor compliance with the
terms and provisions hereof or thereof, will contravene any provision of
any material law, statute, rule or regulation to which the Company is
subject or any material judgment, decree, franchise, order or permit
applicable to the Company or will conflict or be inconsistent with or will
result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any material lien,
security interest, charge or encumbrance upon any property or assets of the
Company pursuant to the terms of any material indenture, mortgage, deed of
trust, agreement or other instrument to which the Company is a party or by
which it is bound or to which it may be subject, or violate any provision
of the Articles of Incorporation or Bylaws of Company.
(d) Litigation. Except as previously disclosed to the Bank in writing,
there are no actions, suits or proceedings pending or threatened against or
affecting the Company before any court or tribunal or before any
governmental or administrative body or agency, which in any one case or in
the aggregate if determined adversely to the interest of the Company would
have a material adverse effect on the business, properties, condition
(financial or otherwise) or operations, of the Company, taken as a whole.
The Company is not in default in any material respect with respect to any
applicable statute, rule, writ, injunction, decree, order or regulation of
any governmental authority having jurisdiction over the Company.
16
(e) Governmental Approvals. No order, permission, consent, approval,
license, authorization, registration or validation of, or filing with, or
exemption by, any governmental agency, commission, board or public
authority is required to authorize, or is required in connection with, the
execution, delivery and performance of this Agreement or any other Related
Document to which the Company is a party by the Company or the taking of
any action hereby or thereby contemplated by the Company.
(f) Financial Statements. The Company has heretofore furnished the
Bank the balance sheet of the Company dated June 30, 1998 and the related
statements of income and cash flows for the period ended on such date(s).
As of such date(s) the Company had no material liabilities, contingent or
otherwise, which were required to be recorded in accordance with GAAP,
other than those set forth on such financial statements, which may
materially adversely affect the operations, business, property or assets or
condition (financial or otherwise) of the Company taken as a whole. Such
financial statements (including in each case the related schedules and
notes) fairly presented the financial condition of the Company, as of the
date(s) of such balance sheet and the results of its operations for the
period covered by such statements of income and cash flows. There has been
no material adverse change in the operations, business, property or assets,
or in the condition (financial or otherwise) of the Company since the
date(s) of the respective financial statements referenced above.
(g) Federal Reserve Margin Regulations. The Company is not engaged in
the business of extending credit for the purpose of purchasing or carrying
any margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System of the United States). If requested
by the Bank, the Company will furnish to the Bank statements in conformity
with the requirements of the Federal Reserve Form U-1 referred to in
Regulation U of said Board of Governors.
(h) Environmental Representations.
(i) Except as previously disclosed to the Bank in the
Environmental Report or otherwise in writing, all Property of the
Company and the operations and activities thereon, have been and
continue to be in compliance in all material respects with the
requirements of all applicable Environmental Laws. Except as
previously disclosed to the Bank in writing, the Company has no
knowledge of any presence, disposal, release, or threatened release of
any Hazardous Materials that constitutes or results in any material
respect in a violation or claimed violation of any applicable
Environmental Law on or from any Property. Except as previously
disclosed to the Bank in writing, the Company has no knowledge of any
actions, suits, investigations, liabilities, inquiries or other
proceedings, rulings, orders, or citations involving the Company
pending, existing or threatened, as the result of the failure of the
Company or any predecessor of Company, to comply (or the assertion of
liability even if in compliance) with any requirement of any
Environmental Law with respect to any Property. For the purposes of
this Agreement, the terms "disposal," "release," and "threatened
release," shall mean any disposal, release, and threatened release in
or
17
for the purposes of the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended ("CERCLA"), or any other
Environmental Law, as in effect, now for the making of this
representation on the date hereof, or at any time hereafter when this
representation is made.
(ii) Without limiting the generality of the foregoing:
(1) Except as previously disclosed to the Bank in writing,
there are no outstanding orders, judgments, decrees or
stipulations of any court, any other governmental or
administrative body or agency (including, but not limited to, in
favor of any citizens' group) affecting any Property, or any
portion thereof, based on any violation or claimed violation of
any Environmental Law. Except as previously disclosed to the Bank
in writing, the Company has all permits necessary for discharges
to the air or water from its operations and activities on any
Property or affecting solid and hazardous waste generation,
storage, treatment, and disposal on or from any Property. All
material permits required under applicable Environmental Laws to
enable the Company to operate its business at the Property are in
full force and effect, and all material permits and all
conditions and agreements contained therein have been
substantially complied with.
(2) Except as previously disclosed to the Bank in writing,
to the best knowledge of the Company, no materials from any
Property have been disposed of at any of the sites listed by the
U.S. Environmental Protection Agency in the proposed or final
National Priorities List of hazardous waste sites developed
pursuant to Section 105(8)(B) of CERCLA or any similar official
state list as of the date hereof. Additionally, to the knowledge
of the Company, no Property and no other real property formerly
owned, occupied, used or leased by the Company is presently under
investigation by federal, state or local governmental authorities
or is listed on the above-mentioned National Priorities List or,
except as previously disclosed to the Bank in writing, is
formally proposed for listing on the above-mentioned National
Priorities List or any similar official state list.
(3) The Company has previously provided to the Bank in
writing a list of all underground storage facilities ("UST") of
any type on each of the Properties and such list is true,
accurate and complete as of the date hereof.
(4) Except as previously disclosed to the Bank in writing,
to the best of the knowledge of the Company, no Property contains
any polychlorinated biphenyls as defined by the Toxic Substances
Control Act, as amended.
18
(i) ERISA. Except as previously disclosed to the Bank in writing, the
Company has not incurred any material accumulated funding deficiency within
the meaning of ERISA or incurred any material liability to the PBGC in
connection with any employee benefit plan (or other class of benefit which
the PBGC has elected to insure) other than a multiemployer plan within the
meaning of ERISA, or, to the Company's actual knowledge, in connection with
any such multiemployer plan, established or maintained by the Company.
Except as previously disclosed to the Bank in writing, the Company has
fully complied in all material respects with the applicable administrative,
reporting and substantive requirements of ERISA and any other applicable
law, rule or regulation with respect to each such plan.
(j) Investment Company Act. The Company is not an "investment company"
or a company controlled by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(k) Taxes. The Company has filed all United States federal tax returns
and all other tax returns which are required to be filed and has paid all
taxes due pursuant to said returns or pursuant to any assessment received
by the Company except such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided. Except as
previously disclosed to the Bank in writing, to the knowledge of the
Company, no tax liens have been filed and no claims are being asserted with
respect to any such taxes. The charges, accruals and reserves on the books
of the Company in respect of any taxes or other governmental charges are
adequate in all material respects.
(l) Intellectual Property. The Company owns and possesses all such
patents, patent rights, trademarks, trademark rights, trade names, trade
name rights, service marks, service xxxx rights and copyrights as the
Company reasonably considers necessary for the conduct of its business
without, to the knowledge of the Company and except as previously disclosed
to the Bank in writing, individually or in the aggregate, any infringement
upon the rights of other persons which would be reasonably likely to have a
materially adverse effect on the business of the Company in the aggregate.
(m) Accuracy of Information. No information, exhibit or report
furnished by the Company to the Bank in connection with this Agreement, any
other agreement, document or instrument between the Company and the Bank,
or the negotiation of the transaction described herein contained at the
time so furnished any misstatement of a material fact or omitted at such
time to state a material fact or any fact necessary to make the statements
contained therein not materially misleading.
(n) Related Documents. The Company makes each of the representations
and warranties contained in the Related Documents to which the Company is a
party, to and for the benefit of the Bank as if the same were set forth in
full herein.
19
Section 6..Covenants. So long as the Termination Date has not occurred or
any amount is due or owing to the Bank hereunder, the Company agrees and
covenants that unless the Bank otherwise consents in writing:
(a) Financial Reports. The Company will furnish to the Bank:
(i) within 125 days after the end of each fiscal year of the
Company , an audited report certified by independent certified public
accountants of recognized standing selected by the Company and
satisfactory to the Bank containing a balance sheet of the Company as
of the close of such fiscal year and the related statements of income
and cash flows for such fiscal year, setting forth in each case in
comparative form corresponding figures from the preceding report, all
of which shall be in reasonable detail and prepared in accordance with
GAAP;
(ii) within 50 days after the end of each fiscal quarter of each
fiscal year of the Company, an unaudited balance sheet of the Company
as of the close of such quarter and the related statements of income
and cash flows for such fiscal quarter and for the period from the
beginning of such fiscal year to the end of such quarter, setting
forth in each case in comparative form the corresponding figures for
the corresponding period in the preceding fiscal year, all in
reasonable detail and certified by the Chief Financial Officer of the
Company;
(iii) at the time of the delivery of the financial statements
required by clause (i) and clause (ii) of this Section 6(a), a
certificate of the Company executed by the Chief Financial Officer of
Company, to the effect that there exists no Event of Default and no
condition, event or act which, with the giving of notice or lapse of
time, or both, would constitute such an Event of Default, or if any
such Event of Default, condition, event or act exists, specifying the
nature thereof, the period of existence thereof and the action the
Company proposes to take with respect thereto;
(iv) Copies of (a) the quarterly financial statements of Holdings
within fifty (50) days after the end of each calendar quarter and (b)
year end audited financial statements of Holdings, within 125 days
after its fiscal year end; and
(v) with reasonable promptness, such further information
regarding the business, affairs and financial condition of the Company
as the Bank may reasonably request.
(b) Payment of Charges. The Company will pay and discharge all taxes,
assessments and governmental charges or levies imposed upon it or its
property or assets, or upon properties leased by it (except with respect to
those obligations under leases which the Company's lessor is obligated to
pay), prior to the date on which penalties attach thereto, and all material
claims which if unpaid might become a lien or charge upon its property or
assets, provided that the Company shall not be required to pay
20
any such tax, assessment, charge, levy or claim the payment of which is
being contested in good faith and by proper proceedings if adequate
reserves with respect thereto have been set up by the Company.
(c) Insurance. The Company will maintain insurance coverage by
financially sound and reputable insurers in such forms and amounts and
against such risks as are customary for Persons of established reputation
engaged in the same or similar businesses and owning and operating similar
properties.
(d) Inspection of Books and Assets, Confidentiality. The Company will
allow any representative of the Bank to visit and inspect any of its
properties, to examine its books of record and account and to discuss its
affairs, finances and accounts with its officers, all at such reasonable
times and as often as the Bank may reasonably request. The Bank shall
insure that all confidential information relating to the Company which the
Bank or any of its representatives may obtain as a result of such
inspection or examination shall not be published, disclosed, or made
accessible by it to any other Person at any time without the prior written
consent of the Company, to which such confidential information relates;
provided, however, that the restrictions of this sentence shall not apply
(i) as may otherwise be required by law, (ii) to the extent such
information shall otherwise have become publicly available, or (iii) to
disclosure to its attorneys related to this Agreement and the Letter of
Credit.
(e) Notices. The Company will deliver to the Bank promptly after any
executive officer of Company obtains any knowledge of the existence of any
Event of Default or any condition, event or act which, with the giving of
notice or lapse of time, or both, would constitute an Event of Default, a
certificate signed by an officer of the Company specifying to the best of
his or her knowledge the nature thereof, the period of existence thereof
and what action the Company proposes to take with respect thereto.
(f) Litigation. The Company will promptly give written notice to the
Bank of (i) any action, proceeding or claim, which has been commenced or
threatened against the Company and (ii) any dispute which may exist between
the Company and any governmental regulatory body, if any such action,
proceeding, claim or dispute, if adversely determined, would have a
material adverse effect on the Company taken as a whole.
(g) Preservation of Existence, Compliance with Laws. The Company will
maintain and preserve its corporate existence and qualification and right
to carry on its business and duly procure all necessary renewals and
extensions thereof, use its best efforts to maintain, preserve and renew
all material rights, powers, privileges and franchises which in the opinion
of the Board of Directors of the Company continue to be advantageous to it
and comply in all material respects with all applicable laws, statutes and
regulations in respect of the conduct of its business.
(h) Environmental Laws. The Company will keep and maintain all
Properties in compliance with and not cause or permit any Property to be in
violation of
21
any applicable Environmental Law. The Company shall not generate,
manufacture, or dispose of on or under any Property any Hazardous Materials
other than in compliance with applicable Environmental Laws. As soon as
practicable, and in any event within twenty days after receipt by the
Company of (i) any notice of claim to the effect that such entity is or may
be liable to any Person as a result of the release or threatened release by
such entity or any other Person of any Hazardous Material into the
environment, or (ii) any notice alleging any material violation of any
Environmental Law, the Company shall notify the Bank of such receipt and
the Company shall deliver to the Bank a copy of the notice so received by
the Company.
(i) ERISA. As soon as possible and in any event within 10 days after
the Company knows that any event which would constitute a reportable event
under Section 4043(b) of Title IV of ERISA with respect to any employee
pension or other benefit plan of the Company subject to such Title has
occurred (other than an event for which the 30-day notice requirement to
the PBGC has been waived), or that the PBGC or the Company has instituted
or will institute proceedings under such Title to terminate such plan, the
Company will deliver to the Bank a certificate of the chief financial
officer of the Company, setting forth details as to such reportable event
and the action which the Company proposes to take with respect thereto,
together with a copy of any notice of such reportable event which may be
required to be filed with the PBGC, or any notice delivered by the PBGC
evidencing its intent to institute such proceedings, or any notice of the
PBGC that the plan is to be terminated, as the case may be. For the
purposes of this covenant, the Company shall be deemed to have knowledge of
all facts attributable to the plan administrator under such Title IV. If
the Bank so requests or if any annual report referred to in this sentence
describes an event for which the 30-day notice period to the PBGC has been
waived, the Company shall furnish the Bank (or cause the plan administrator
to furnish the Bank) with the annual report for each plan covered by such
Title IV and filed with the Internal Revenue Service not later than 10 days
after such report has been filed.
(j) Liens. The Company will not contract, create, incur, assume or
suffer to exist any mortgage, pledge, lien or other charge or encumbrance
of any kind (including the charge upon property purchased under conditional
sale or other title retention agreements but excluding liens incurred in
the Ordinary Course of Business not in connection with the borrowing of
money or the obtaining of credit) not existing on the date of this
Agreement upon, or grant any security interest in, the Project or Company's
assets, whether now owned or hereafter acquired other than:
(i) liens for taxes not yet due, or liens for taxes being
contested in good faith and by appropriate proceedings for which
adequate reserves have been established;
(ii) liens in respect of property or assets of the Company
imposed by law, which were incurred in the ordinary course of
business, such as carriers', warehousemen's and mechanics' liens and
other similar liens arising in the ordinary course of business and (x)
which do not in the aggregate materially
22
detract from the value of such property or assets or materially impair
the use thereof in the operation of the business of the Company or (y)
which are being contested in good faith by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or sale
of the property or assets subject to any such lien;
(iii) liens in existence on the Date of Issuance which are set
forth in a writing delivered to the Bank prior to or on the Date of
Issuance and which have been agreed to by the Bank;
(iv) pledges, or deposits in connection with worker's
compensation, unemployment insurance and other social security
legislation;
(v) judgment liens in existence less than 15 days after the entry
thereof or with respect to which execution has been stayed or the
payment of which is covered in full (subject to a customary
deductible) by insurance;
(vi) easements, restrictions and other minor defects of title
which are not, in the aggregate, material, and which do not,
individually or in the aggregate, materially adversely affect the
Company in the aggregate or the rights and remedies of the Bank
hereunder.
Notwithstanding the above, but subject to the limitations on Indebtedness
in Section (k)(iv) contained herein, Company shall have the right to incur or
create first lien purchase money security interests ("PMSI") or enter into
Equipment leases not to exceed $1,000,000 annually in the aggregate for future
equipment acquisitions in the Ordinary Course of Business.
(k) Financial Covenants of Company. The Company agrees:
(i) Company will not make any acquisitions of assets outside of
the Ordinary Course of Business or sell on an annual basis any assets
of Company outside of the Company's Ordinary Course of Business
without the prior written consent of the Bank provided, that, the
Company may sell its existing real property and improvements thereon
from which it will move to the Project; and
(ii) Except with respect to acquisitions in the Ordinary Course
of Business or a merger of Holdings with Company, the Company will not
merge or consolidate with any entity or enter into any transaction
which results in a change of control of the Company or (except for
such merger with the Company) Holdings and will not dissolve or enter
into any joint venture or become a partner, member or shareholder in
any partnership, limited liability company or corporation which
results in a change of control of the Company or Holdings; and
(iii) the Company will not invest any funds in or loan any funds
to any other Person or entity inconsistent with the current investment
policies
23
established by the Board of Directors of Company and which are
otherwise reasonably acceptable to the Bank; and
(iv) Without the Bank's prior written consent, which may be
withheld by the Bank in its sole discretion, Company will not incur
any Indebtedness of any nature other than (A) unsecured debt arising
in the Ordinary Course of Business, (B) debt incurred in connection
with acquisitions in the Ordinary Course of Business secured only by
the assets so acquired, or (C) Indebtedness secured by PMSI's or
Equipment leases entered into in compliance with Section 6(k) hereof;
and
(v) Company will not directly or indirectly sell, grant, convey,
assign or otherwise transfer or permit to be the subject of a transfer
any portion of the Project or any facilities or improvements
constructed with the proceeds of the Bonds or transfer any legal or
beneficial interest therein without the Bank's prior written consent,
which may be withheld by the Bank in its sole discretion; and
(vi) Company will maintain at all times as determined on a
calendar year basis a Net Worth equal to at least $40,000,000 and a
Tangible Net Worth of at least $20,000,000. As used herein, (i) "Net
Worth" means the total stockholders equity of Company as presented in
its consolidated balance sheet, which consists of the total of
preferred stock and common stock, additional paid in capital and
retained earnings less equity adjustment from foreign currency
translation as determined in accordance with generally accepted
accounting principles, and (ii) "Tangible Net Worth" means the total
stockholders equity of Company as presented in its consolidated
balance sheet, which consists of the total of preferred stock and
common stock, additional paid in capital and retained earnings less
equity adjustment from foreign currency translation and less
intangible assets net of accumulated amortization as defined in
accordance with GAAP; and
(vii) Company will maintain as of the end of each fiscal quarter,
commencing with the fiscal quarter ending September 30, 1998, a
quarterly debt service coverage of not less than 3:00 to 1:00 (i.e.,
net income plus depreciation plus amortization must equal 3.0 times
scheduled principal payments on all Indebtedness, including
amortization of the Bonds but excluding amortization of the
Subordinate Bonds) determined on a Calendar Year to date basis;
(l) Principal Operating Accounts. Until termination of this Agreement,
the Company will maintain or caused to be maintained in accounts opened at
the Bank all primary operating and disbursement accounts (but excluding
payroll accounts) of the Company.
(m) Amendment of Related Documents. Except for a permitted
substitution of the Letter of Credit, the Company will not enter into or
consent to any amendment of any of the Related Documents, or require or
consent to the replacement of
24
the Trustee, the Tender Agent or the Remarketing Agent, or permit any Bonds
(other than Pledged Bonds) not to be secured by the Letter of Credit,
without the Bank's prior written consent.
(n) Registration of Bonds. The Company will cause all Pledged Bonds to
be registered in the name of the Company as pledgor or at the Bank's
option, the Bank as pledgee, pursuant to the Pledge and Security Agreement.
(o) Optional Redemption. The Company will not give any direction to
the Issuer to optionally redeem all or any portion of the Bonds in
accordance with Section 302(a) of the Indenture unless (i) the Bank shall
have provided its written consent thereto or (ii) the Company shall have
deposited (or caused to be deposited) with the Trustee an amount sufficient
to effect such optional redemption; or (iii) the Bank has given the Company
a Notice of Non-Renewal.
(p) Indenture, Etc. All covenants and obligations of the Company set
forth in the Indenture and the Lease Agreement that run to or are made for
the benefit of the Bank are incorporated herein with the same effect as if
set forth at length herein.
(q) Sale of Subordinate Bonds. The Company will not pledge, sell,
assign or transfer the Subordinate Bonds without the prior consent of the
Bank.
(r) Disbursement of Project Funds. The Company will not present to the
Bank (for approval and submission to the Trustee) a Written Request for a
disbursement of Project Funds for payment of Project Costs related to
construction of the Project unless such Written Request is accompanied by
an approval executed by an Independent Architect, which may be in the form
of an AIA Form G702 signed by the Company, the Independent Architect and
the general contractor for the Project.
(s) Environmental Report Compliance and Update. The Company agrees
that all actions recommended by Kingston in the Environmental Report will
have been taken and completed to the satisfaction of the Bank on or prior
to the date the Company occupies the Project and that the Company will
provide to the Bank an update to the Environmental Report to such effect on
or before such date.
Section 7..Events of Default. Upon the occurrence of any of the following
events (herein referred to as an "Event of Default"), unless waived by the Bank
pursuant to this Section 7:
(a) the Company shall fail to pay when due any amount specified in
Section 3 hereof; or
(b) any representation or warranty made by the Company herein or in
the Related Documents or in any certificate, financial or other statement
furnished by the Company pursuant to this Agreement or the Related
Documents, was untrue or incomplete in any material respect when made; or
25
(c) if, for any reason (other than release by the Bank or a permitted
substitution of the Letter of Credit) this Agreement or the Related
Documents shall cease to be valid and binding and in full force and effect
or if the Company shall assert that it is not liable under this Agreement
or the Related Documents; or
(d) the Company shall fail to comply with any of the financial
covenants set forth in Section 6(k) or shall fail to maintain any of the
accounts described in Section 6(l) hereof; or
(e) the Company shall default in any material respect in the due
performance or observance of any term, covenant or agreement on its part to
be performed or observed pursuant to any of the provisions of this
Agreement (other than those referred to in Sections 7(a), 7(b) and 7(c)
above) and such default shall continue unremedied for a period of 30 days;
unless such default cannot be remedied within 30 days, and Company has
commenced cure and diligently prosecutes cure of such default, then Company
shall be granted an additional reasonable period of time to cure such
default but in any event no more than 90 days from the end of such 30 day
period; or
(f) an "Event of Default" under the Lease Agreement or the Indenture
shall have occurred and be continuing; or
(g) the Company is in default on or pursuant to the terms of any other
obligation of the Company to the Bank continuing beyond the applicable
grace period set forth in the document or documents governing such
obligation; or
(h) any obligations of the Company in respect of indebtedness for
borrowed money or a lease of property which would be classified as a
"capital lease" in accordance with GAAP (including indebtedness assumed,
guaranteed or as to which such entity shall otherwise be liable, directly
or indirectly) in an aggregate amount in excess of $500,000 is declared to
be or becomes due and payable prior to the stated maturity thereof or such
obligations are not paid as and when the same become due and payable, or
there shall occur and continue any default under any instrument, agreement
or evidence of indebtedness relating to any such obligations the effect of
which is to permit the holder or holders of such instrument, agreement or
evidence of indebtedness, or a trustee, agent or other representative on
behalf of such holder or holders, to cause the indebtedness for borrowed
money evidenced thereby to become due prior to its stated maturity; or
(i) the Company shall suspend or discontinue its business operations
for more than 30 days; shall make an assignment for the benefit of
creditors; shall generally fail to pay its debts as such debts become due;
shall file a petition commencing a voluntary case concerning such
corporation under any chapter of Title 11 of the United States Code
entitled "bankruptcy," or an involuntary case shall be commenced against
the Company under any such chapter and relief is ordered against such
corporation or the petition is controverted but is not dismissed within 60
days after the commencement of the case; or shall petition or apply to any
tribunal for the appointment of any receiver, custodian, liquidator or
trustee of or for it or any substantial part of its property, or shall
26
commence any proceeding relating to the Company under any bankruptcy,
reorganization, arrangement, readjustment of debt, receivership,
dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect, or if there is commenced against the Company any
such proceeding which remains undismissed for a period of 60 days, or an
order, judgment or decree approving the petition in any such proceeding
shall be entered; or the Company by any act or failure to act indicates its
consent to, approval of or acquiescence in any such proceeding or the
appointment of any receiver, custodian, liquidator or trustee of or for it
or any substantial part of its property, or suffers any such appointment to
continue undischarged or unstayed for a period of 30 days; or the Company
shall take any action for the purpose of effecting any of the foregoing; or
(j) a judgment or judgments for the payment of money in excess of
$250,000 in the aggregate shall be rendered against Company and any such
judgment or judgments for which there is no insurance coverage shall remain
unsatisfied, unstayed or unbonded for a period in excess of 30 days; or
(k) there shall occur a "reportable event" under Section 4043(b) of
Title IV of ERISA with respect to any employee pension or other benefit
plan of the Company subject to such Title (other than an event for which
the 30-day notice requirement of the PBGC has been waived) or any such plan
shall be the subject of termination proceedings (whether voluntary or
involuntary) and there shall result from such event or termination
proceedings a liability of the Company to the PBGC which will have a
material adverse effect upon the business, operations or financial
condition of the Company; or
(l) the occurrence of an Event of Default with respect to the
Subordinate Bonds; or
(m) Holdings encumbers, pledges, hypothecates or grants a security
interest in any ownership interests of Holdings in the Company if the
result thereof is that Holdings will own less than 51% of the voting stock
of the Company; or
(n) Holdings sells, assigns or otherwise transfers the shares of
common stock of the Company to any Person if the result thereof is that
Holdings will own less than 51% of the voting stock of the Company;
then, in any such event, the Bank may, (i) by written notice to the Company,
declare the obligations of the Company under Section 3 hereof to be forthwith
due and payable, whereupon the same shall become due and payable without demand,
presentment, protest or further notice of any kind, all of which are hereby
expressly waived; (ii) decline to reinstate any amount available under the
Letter of Credit, including sending notice to the Company and the beneficiary of
the Letter of Credit as provided in Section 3(f)(ii) and in the Letter of Credit
that the Bank will not reinstate the amount of any "C Drawing" thereunder; (iii)
notify the Company and the beneficiary of the Letter of Credit pursuant to the
Letter of Credit that the Letter of Credit shall terminate thirty (30) days
following delivery of such notice to the addressees thereof; (iv) by written
notice to the Company demand payment forthwith of the amount available to be
drawn under the Letter
27
of Credit on the date of such demand; (v) demand that the Company procure the
issuance of an alternate or substitute letter of credit from another financial
institution or otherwise arrange to purchase or defease the Bonds or otherwise
arrange for the prompt release of the Bank's obligations under the Letter of
Credit; (vi) exercise any right provided in the Indenture to cause an
acceleration or a mandatory redemption of the Bonds to be declared; and/or (vii)
pursue any other remedy available to it under this Agreement, under the Related
Documents or otherwise.
Section 8..Amendments, Etc. No amendment or waiver of any provision of this
Agreement nor consent to any departure by the Company therefrom shall in any
event be effective unless the same shall be in writing and signed by the Bank,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
Section 9..Notices. Except as expressly provided for herein, all notices
and other communications provided for hereunder shall be in writing and shall be
deemed to have been duly given (a) when delivered personally, (b) on the
following Business Day when sent by overnight courier, (c) on dispatch when sent
by telecopy (confirmed by telephone), and (d) on the fifth following Business
Day when mailed by registered or certified mail, postage prepaid, return receipt
requested, to the address set forth in the preamble hereof, or to such other
address as may be specified in a notice given by one party to another, except
that communications with the Bank with respect to the Letter of Credit shall be
made as provided in the Letter of Credit.
Section 10. No Waiver; Remedies. No failure on the part of the Bank to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other further exercise thereof or the exercise of any other right.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
Section 11. Right of Setoff. Upon the occurrence and during the continuance
of any Event of Default, the Bank is hereby authorized at any time and from time
to time, without notice to the Company (any such notice being expressly waived
by the Company), to setoff and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by the Bank to or for the credit or the account of the Company,
regardless of the currency of such deposits or indebtedness, against any and all
of the obligations of the Company now or hereinafter existing under this
Agreement, irrespective of whether or not the Bank shall have made any demand
under this Agreement and although such obligations may be contingent and
unmatured; and if such deposits or other indebtedness are in a currency other
than U.S. dollars, the Bank is authorized to convert the same to U.S. dollars
upon such setoff, appropriation and application. The rights of the Bank under
this Section are in addition to other rights and remedies which the Bank may
have including, without limitation, other rights of setoff.
Section 12. Indemnification. The Company hereby indemnifies and holds
harmless the Bank (and its directors, officers, employees, attorneys and agents)
from and against any and all claims, damages, losses, liabilities, reasonable
costs or expenses whatsoever which the Bank may incur (or which may be claimed
against the Bank by any Person) by reason of, or
28
in connection with: (a) the execution and delivery or transfer of, or payment or
failure to pay under, the Letter of Credit (including, without limitation,
actions commenced by any Person including the Company for wrongful dishonor or
to enjoin the Bank from honoring a Letter of Credit), (b) the issuance and sale
of the Bonds, including without limitation any of the foregoing resulting from
any misstatement or omission in the Official Statement (other than in the
Official Statement referring to the Bank in Appendix A thereto), (c) the pledge
of any of the Pledged Bonds pursuant to the Pledge and Security Agreement;
provided that the Company shall not be required to indemnify the Bank for any
claims, damages, losses, liabilities, costs or expense, to the extent, but only
to the extent, caused by the willful misconduct or gross negligence of the Bank
or by the Bank's default under this Agreement or any of the Related Documents.
Nothing in this Section 12 is intended to limit the reimbursement obligation of
the Company contained in Section 3(a) hereof. If any action shall be brought
against the Bank in respect of which indemnity may be sought against the
Company, the Bank shall promptly notify the Company in writing, and the Company
shall promptly assume the defense thereof, including the employment of counsel,
the payment of all expenses and the right to negotiate and consent to
settlement. The Bank shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, and the fees and expenses of
such counsel shall be at the expense of the Company. The Company shall not be
liable for any settlement of any such action effected without the Company's
consent by the Bank, but if settled with the consent of the Company or if there
shall be a final judgment for the plaintiff in any such action against the
Company or the Bank, with or without the consent of the Company, the Company
agrees to indemnify and hold harmless the Bank to the extent provided herein.
Section 13. Continuing Obligation. This Agreement is a continuing
obligation, shall survive the termination of the Letter of Credit and shall (a)
be binding upon the Company, its successors and assigns, and (b) inure to the
benefit of and be enforceable by the Bank and its successors and assigns until
all of the financial and indemnification obligations owing by Company to Bank
under this Reimbursement Agreement or any of the Security Documents have been
paid and/or performed in full and then terminate; provided that the Company may
not assign all or any part of this Agreement without the prior written consent
of the Bank, except in connection with a transfer permitted under this
Agreement.
Section 14. Transfer of Letter of Credit; Reduction of Stated Amount. The
Letter of Credit may be transferred in accordance with the provisions set forth
therein and the Stated Amount of the Letter of Credit may be reduced in
accordance with the provisions set forth therein.
Section 15. Limitations on Bank Liability. The Company assumes all risks
of, and the Bank shall not be liable or responsible for, the acts or omissions
of the Trustee and any beneficiary or transferee of the Letter of Credit with
respect to its use of the Letter of Credit and whether any demand under the
Letter of Credit is inconsistent with any other demand or with any Related
Document. As between the Company and the Bank, neither the Bank nor any of its
officers or directors shall be liable or responsible for any claim, damage,
loss, liability, cost or expense which the Company may incur (or which may be
claimed by any Person) by reason of or in connection with the execution and
delivery or transfer of the Letter of Credit or under any Related Document or
any circumstance or event referred to in Section 3 of this Agreement,
29
except only that the Company shall have a claim against the Bank, and the Bank
shall be liable to the Company, to the extent, but only to the extent, of any
direct, as opposed to consequential, damages suffered by the Company which the
Company proves were caused by the Bank's gross negligence or willful misconduct
or by the Bank's default under this Agreement or any of the Related Documents.
In furtherance and not in limitation of the foregoing, the Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
In addition, the Company acknowledges that it has specifically requested that
the Letter of Credit provide for honor within a period of time significantly
shorter than the three-day period for examining documents provided for under
applicable law and banking usage, and that this feature of the Letter of Credit
is not consistent with bank usage and increases the risk that purported demands
under the Letter of Credit may not receive the same examination (and the Bank
may not be able to obtain the opinion of its counsel or the Company with respect
to such demand) had such three-day period been available to the Bank, and the
Company accepts and agrees not to hold the Bank responsible for such variance
from bank usage. Any claim or demand by the Company for gross negligence or
willful misconduct against the Bank shall require that the Company establish
that the Bank's conduct was not occasioned or the result of such shortened
examination period. The Company acknowledges and agrees that the Bank also shall
be relieved from responsibility for (and its right to reimbursement hereunder
shall not be impaired by) any act or omission for which banks are relieved of
responsibility under the Uniform Customs and Practice for Documentary Credits,
1993 revision, ICC Publication No. 500 (1993).
Section 16. Costs, Expenses and Taxes. The Company agrees to pay on demand
all reasonable costs and expenses of the Bank in connection with the
preparation, execution, delivery and administration of this Agreement and any
other documents which may be delivered in connection with this Agreement,
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Bank with respect thereto, with respect to any opinions rendered
by such counsel, and with respect to advising the Bank as to its rights and
responsibilities under this Agreement, and all reasonable costs and expenses in
connection with the enforcement or any renegotiation or amendment of this
Agreement and such other documents which may be delivered in connection with
this Agreement. In addition, the Company shall pay any and all stamp and other
taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of this Agreement or the Pledge and
Security Agreement, and such other documents and agrees to save the Bank
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes and fees.
Section 17. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 18. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of Missouri applicable to
contracts to be performed in the State of Missouri.
30
Section 19. Substitute Letter of Credit Issuing Office. In the event that
the Bank determines, in its complete discretion, that the banking office of the
Bank, as set forth in the Letter of Credit shall be changed to another banking
office within the United States of America, (a) in order to avoid any increased
cost or amount referred to in Section 3(a), or (b) in the event the adoption of
any applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank with any request or directly
(whether or not having the force of law) of any such authority, central bank or
comparable agency, shall make it unlawful for the Bank to maintain the Letter of
Credit at such Bank's aforesaid address, then the Bank shall notify the Trustee
and the Company in writing not less than 10 Business Days prior to such change
and (with the written consent of the Company only in the case of avoiding an
increased cost or amount as referred to in clause (a) above), upon receipt of
such notice the Letter of Credit shall be deemed issued by such other banking
office in the United States on the effective date that the Bank specifies in its
notice.
Section 20. Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
Section 21. Accounting Terms and Definitions. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with generally accepted
accounting principles as in effect from time to time, applied on a basis
consistent (except for changes approved by the Company's independent
accountants) with the most recent financial statements as described in Section
6(a) of the Company delivered to the Bank.
Section 22. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original with the same effect as if the
signature hereto and thereto were upon the same instrument.
Section 23. Bank Consent. Whenever any provision in this Reimbursement
Agreement or in any of the Security Documents requires the consent of the Bank
to an administrative or ministerial act, Bank agrees that such consent will not
be unreasonably withheld or delayed unless the provision otherwise expressly
states that consent may be granted or denied in Bank's sole discretion. Company
acknowledges and agrees that Bank's agreement not to unreasonably withhold or
delay its consent shall apply only in the limited context of an administrative
or ministerial act, and in no event shall such agreement extend to an act which
would require an underwriting decision by Bank, such as (without limiting the
generality of the aforesaid) a request to transfer ownership rights in the
Company or the Property.
Section 24. Year 2000 Compliance. The Company covenants and agrees to take
all reasonable steps and implement all reasonable procedures necessary to insure
that all software utilized in the conduct of Company's business will have
appropriate capabilities and compatibility for operation to handle calendar
dates falling on or after January 1, 2000, and all
31
information pertaining to such calendar dates, in the same manner and with the
same functionality as the software does respecting calendar dates falling on or
before December 31, 1999. Further, Company covenants and agrees that the
data-related user interface functions, data-fields, and data-related program
instructions and functions of the software utilized by the Company will on or
before December 31, 1999, include the indication of the century.
Section 25. Waiver of Jury Trial. THE BANK AND THE COMPANY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN), OR ACTIONS OF THE BANK OR THE COMPANY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE BANK ENTERING INTO THIS AGREEMENT.
Section 26. Statements Required by Law.
(i) Section 432.045 Notice. The following notice is given to
comply with Section 432.045 of the Revised Statutes of Missouri:
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO
EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT THE BANK
AND COMPANY FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS
THEY REACHED COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING AND
THE SECURITY DOCUMENTS, WHICH ARE THE COMPLETE AND EXCLUSIVE
STATEMENTS OF THE AGREEMENTS BETWEEN THE PARTIES HERETO, EXCEPT AS
THEY MAY LATER AGREE IN WRITING TO MODIFY IT.
(ii) K.S.A. ss.16-118 Notice. THIS WRITTEN CREDIT AGREEMENT IS A
FINAL EXPRESSION OF THE CREDIT AGREEMENT BETWEEN THE BANK AND THE
COMPANY AND SUCH CREDIT AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE
OF ANY PRIOR ORAL CREDIT AGREEMENT OR OF A CONTEMPORANEOUS ORAL CREDIT
AGREEMENT BETWEEN THE BANK AND THE COMPANY.
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective representatives thereunto duly
authorized as of the date first above written.
LabOne, Inc., a Delaware corporation
By: /s/ Xxxx Xxxxxxxxxxx
-------------------------------------------
Print Name: Xxxx Xxxxxxxxxxx
---------------------------------
Title: V.P. Finance, CAO, Treasurer
--------------------------------------
33
Commerce Bank, N.A.
By: /s/ Xxx Xxxx
------------------------------------------
Print Name: Xxx Xxxx
--------------------------------
Title: Vice President
-------------------------------------
34
