Exhibit 10.1
AG CAPITAL COMPANY
CREDIT AGREEMENT
THIS CREDIT AGREEMENT made and entered into as of June 1, 1999 (the
"Effective Date"), by and between RDO EQUIPMENT CO., a Delaware corporation (the
"Borrower"), whose address is 0000 Xxxxx Xxxxxxxxxx Xxxxx, X.X. Xxx 0000, Xxxxx,
Xxxxx Xxxxxx, 00000-0000, and AG CAPITAL COMPANY, a Delaware corporation (the
"Lender"), whose address is 1500 Radisson Tower, 000 Xxxxx 0xx Xxxxxx, Xxxxx,
Xxxxx Xxxxxx 00000.
RECITALS
A. The Borrower wishes to borrow funds from the Lender and the Lender
wishes to make loans and advances to the Borrower; and
B. The Borrower and the Lender mutually desire to set forth the terms
under which the Lender will extend credit to the Borrower and make
such loans and advances.
NOW, THEREFORE, for and in consideration of the loans and advances to be
made by the Lender to the Borrower hereunder, the mutual covenants, promises and
agreements contained herein, and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the Borrower and the
Lender agree as follows:
The following terms when used in this Credit Agreement shall, except where
the context otherwise requires, have the following meanings both in the singular
and plural forms thereof:
1. DEFINITIONS
"Adjusted Funded Debt" means all Indebtedness which by the terms of the
agreement governing or instrument evidencing such Indebtedness including all
Floor Plan Debt has a final maturity of more than (1) year from the date of
creation thereof (or which is renewable or extendible at the option of the
obligor and offering of the lender for a period or periods more than one year
from the date of origin), including all payments in respect thereof that are
required, or that may be required by the obligor with respect thereto, to be
made within (1) one year from the date of any determination of Adjusted Funded
Debt, whether or not included in current liabilities of such Borrower LESS ANY
NON-INTEREST BEARING DEBT OWED TO AN ORIGINAL EQUIPMENT MANUFACTURER OR ITS
AFFILIATE.
"Advance" means any advance by the Lender made under either of the
Seasonal Commitments. (The face amount of any letter of credit issued by the
Lender for the account of the Borrower shall be deemed an Advance hereunder).
"Affiliate" means any corporation, association, partnership, joint venture
or other business entity directly or indirectly controlling or controlled by, or
under direct or indirect common control of, the Borrower or any of its
Subsidiaries.
"Assignee" has the meaning set forth in Section 19.14.
"Borrower" means RDO Equipment Co., a Delaware corporation.
"Bridge Loan I" means, at any date, the aggregate amount of all Advances
made by the Lender pursuant to Section 11 hereof.
"Bridge Note I" means the note No. 32550, dated October 12, 1998, in the
original principal amount of Five Million Dollars ($5,000,000.00) made by the
Borrower payable to the order of the Lender, together with all extensions,
renewals, modifications, substitutions and changes in form thereof effected by
written agreement between the Borrower and the Lender.
"Business Day" means any day on which the Lender is open for the
transaction of business of the kind contemplated by this Credit Agreement.
"Change of Control" means the occurrence of any of the following
circumstances:
(a) any person or two or more persons acting in concert acquire
beneficial ownership (within the meaning of Rule 13d-3 of the SEC
under the Securities Exchange Act of 1934), directly or indirectly,
of securities of the Borrower (or other securities convertible into
such securities) representing 25% or more of the combined voting
power of all securities of the Borrower entitled to vote in the
election of directors; or
(b) during any period, whether commencing before or after the date
hereof, the membership of the Board of Directors of the Borrower
changes for any reason (other than by reason of death, disability,
or scheduled retirement) so that the majority of the Board of
Directors is made up of persons who were not directors at the
beginning of such period.
"Collateral" means all of the assets of the Borrower or any other party in
which the Lender holds a security interest pursuant to any of the Loan
Documents.
"Coverage Ratio" means Adjusted Funded Debt divided by the rolling four
(4) quarter average EBITDA. One-time non-recurring charges relating to asset
write-downs and severance costs totaling $17.2MM may be added to EBITDA for
purposes of measuring this ratio from the date of this agreement to 10/31/99.
The Borrower will no longer add these one-time charges back to EBITDA for
purposes of measuring this ratio from the period commencing 11/01/99 and beyond.
"Credit Agreement" means this Credit Agreement, as originally executed and
as may be amended, modified, supplemented, or restated from time to time by
written agreement between the Borrower and the Lender.
"Current Assets" means, at any date, the aggregate amount of all assets of
the Borrower that are classified as current assets, on a consolidated basis, in
accordance with GAAP.
"Current Liabilities" means, at any time, the aggregate amount of all
liabilities of the Borrower that are classified as current liabilities, on a
consolidated basis, in accordance with GAAP (including taxes and other proper
accruals and the matured portion of any indebtedness).
"Debt" means (i) all items of indebtedness or liability that, in
accordance with GAAP, would be included in determining total liabilities as
shown on the liabilities side of a balance sheet as at the date of which Debt is
to be determined; (ii) indebtedness secured by any mortgage, pledge, lien or
security interest existing on property owned by the Person whose Debt is being
determined, whether or not the indebtedness secured thereby shall have been
assumed; (iii) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's acceptances
issued for the account of such Person, and (iv) guaranties, endorsements (other
than for purposes of collection in the ordinary course of business) and other
contingent obligations in respect of, or to purchase or otherwise acquire
indebtedness of others.
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"Default" means any event which if continued uncured would, with notice or
lapse of time or both, constitute an Event of Default.
"EBITDA" means Consolidated Earnings Before Interest Taxes Depreciation
and Amortization.
"Environmental Laws" has the meaning set forth in Section 15.17.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended and as may be further amended from time to time, and the rules and
regulations promulgated thereunder by any governmental agency or authority, as
from time to time in effect.
"Event of Default" means any event of default described in Section 18
hereof.
"Fixed Rate" means such rate of interest as may be quoted to Borrower by
Lender at Lender's sole discretion upon request made by Borrower before 11:00
a.m. (central time) at least two Business Days prior to the beginning of the
calendar month specified by Borrower in such request for Interest Rate Periods
as specified by Borrower in such request.
"Fixed Rate Amount" means the amount of any Loan which accrues interest at
a Fixed Rate, which shall be specified in any request by the Borrower to Lender
for a Fixed Rate, and which must be in increments of $100,000, unless otherwise
agreed to by the Lender.
"GAAP" means the generally accepted accounting principles in the United
States in effect from time to time including, but not limited to, Financial
Accounting Standards Board (FASB) Standards and Interpretations, Accounting
Principles Board (APB) Opinions and Interpretations, Committee on Accounting
Procedure (CAP) Accounting Research Bulletins, and certain other accounting
principles which have substantial authoritative support.
"Government Yield" means as of any date of determination the yield
(converted as necessary to the equivalent semi-annual compound rate) on U.S.
Treasury securities having a maturity date closest to the weighted average
maturity of the relevant Loan (to the scheduled installment dates), as published
in The Wall Street Journal (or, if not so published, as determined by the Lender
by using the average quotes obtained by the Lender from three primary dealers
that market U.S. Treasury securities in the secondary market). "U.S. Treasury
securities" means actively traded U.S. Treasury bonds, bills and notes and, if
more than one issue of U.S. Treasury securities is scheduled to mature at or
about the time of the end of the weighted average maturity of the Loan, then to
the extent possible the U.S. Treasury security issued most recently prior to the
date of determination will be chosen as the basis of the Government Yield.
"Hazardous Substance" has the meaning set forth in Section 17.17 hereof.
"Interest Differential" means as of the date of any full or partial
prepayment on any Loan, the Government Yield with respect to such Loan measured
on the date the rate at which interest on such Loan is accruing immediately
prior to such prepayment is set, minus the Government Yield with respect to such
Loan as of the date of such prepayment.
"Interest Rate Period" means the period specified by the Lender in
response to a request by the Borrower that any Fixed Rate Amount of any Loan
accrue interest at a Fixed Rate. All Interest Rate Periods shall be months, but
in no event shall end later than the Maturity with respect to the Seasonal Loan,
and the final maturity date for each other Loan.
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"Issuance Spread" is the amount by which the rate per annum at which
interest accrues on any Loan as of any date such rate is set exceeded the
Government Yield as of such date.
"Lender" means Ag Capital Company, a Delaware corporation, its successors
and assigns.
"Leverage Ratio" means the ratio of Total Liabilities (including Debt)
divided by Tangible Net Worth of the Borrower, as determined on a consolidated
basis, and in accordance with GAAP. One-time non-recurring charges relating to
asset write-downs and severance costs totaling $17.2MM may be added to Tangible
Net Worth for purposes of measuring this ratio commencing with the date of this
agreement to 10/31/99. The Borrower will no longer add these one-time charges
back to Tangible Net Worth for purposes of measuring this ratio from the period
commencing 11/01/99 and beyond.
"LIBOR" for any business day during any calendar month means the quoted
rate of interest per annum determined by the British Banker's Association as the
average of interbank offered rates for dollar deposits in the London market
based on quotations at sixteen (16) major banks (rounded upward, if necessary,
to the nearest 1/100th of 1%).
"Lien" means any lien, security interest, pledge, mortgage, statutory or
tax lien, or other encumbrance of any kind whatsoever (including without
limitation, the lien or retained security title of a conditional vendor),
whether arising under a security instrument or as a matter of law, judicial
process or otherwise or by an agreement of the Borrower to grant any lien or
security interest or to pledge, mortgage or otherwise encumber any of its
assets.
"Loan" means any of the Seasonal Loan I, Seasonal Loan II, Term Loan I,
Term Loan II, Term Loan III, Term Loan IV, Term Loan V, Term Loan VI, Term Loan
VII, and Bridge Loan I.
"Loan Documents" means this Credit Agreement and the Subject Notes and
such other documents as the Lender may reasonably require as security for, or
otherwise executed in connection with, any loan hereunder, all as originally
executed and as may be amended, modified or supplemented from time to time by
written agreement between the parties thereto.
"Material Adverse Occurrence" means any occurrence which materially
adversely affects the present or prospective financial condition or operations
of the Borrower, or which impairs, or may impair, in the Lender's reasonable
judgment, the ability of the Borrower to perform its obligations under the Loan
Documents.
"Maturity" with respect to Seasonal Note I and Seasonal Note II means the
earlier of (a) the date on which the respective Seasonal Note becomes due and
payable upon the occurrence of an Event of Default; or (b) the Termination Date.
"Mortgages" means the mortgages dated January 31, 1996 expressly securing
Term Note IV, and other obligations to Lender, and mortgages dated June 16, 1992
expressly securing Term Note I, February 24, 1992 expressly securing Term Note
II and October 14, 1991, expressly securing Term Note III and as provided in
each such mortgage, other obligations to Lender.
"Mortgage Secured Notes and Loans" has the meaning set forth in Section
12.8.
"Person" means any natural person, corporation, firm, association,
government, governmental agency or any other entity, whether acting in an
individual fiduciary or other capacity.
"Premises" has the meaning set forth in Section 15.17 hereof.
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"Reference Rate" means for any day the rate of interest indicated as the
"prime rate" in the "Money Rates" section of the Wall Street Journal for such
day (or if no such rate is published for such day for the earliest preceding day
for which such rate is published). If such rate ceases to be published, the
"Reference Rate" shall mean a comparable rate determined by the Lender as
indicated in a written notice to the Borrower."
"Regulatory Change" means any change after the date hereof in any (or the
adoption after the date hereof of any new) (a) Federal or state law or foreign
law applying to the Lender (or its successors or assigns); or (b) regulation,
interpretation, directive or request (whether or not having the force of law)
applying or in the reasonable opinion of the Lender (or its successors or
assigns) applicable to, the Lender (or its successors or assigns) of any court
or governmental authority charged with the interpretation or administration of
any law referred to in clause (a) of this definition or of any fiscal, monetary,
or other authority having jurisdiction over the Lender (or its successors or
assigns).
"Seasonal Commitment" means the Lender's obligation to extend Advances to
the Borrower under Sections 2 and 3, as the context may require.
"Seasonal Loan I" means, at any date, the aggregate amount of all Advances
made by the Lender to the Borrower pursuant to Section 2 hereof.
"Seasonal Note I" means the note No. 33590, dated June 1, 1999, in the
original principal amount of Fifteen Million Dollars ($15,000,000.00) made by
the Borrower payable to the order of the Lender, together with all extensions,
renewals, modifications, substitutions and changes in form thereof effected by
written agreement between the Borrower and the Lender.
"Seasonal Loan II" means, at any date, the aggregate amount of all
Advances made by the Lender to the Borrower pursuant to Section 3 hereof.
"Seasonal Note II" means the note No. 33600, dated June 1, 1999, in the
original principal amount of Five Million Dollars ($5,000,000.00) made by the
Borrower payable to the order of the Lender, together with all extensions,
renewals, modifications, substitutions and changes in form thereof effected by
written agreement between the Borrower and the Lender.
"Security Agreement" means the Security Agreement dated as of October 12,
1998 executed by the Borrower in favor of the Lender, as originally executed and
as may be amended, modified or supplemented from time to time by written
agreement between the Borrower and the Lender, and various other security
agreements previously executed in favor of the Lender by Borrower.
"Subject Note(s)" means the Seasonal Note I, Seasonal Note II, Term Note
I, Term Note II, Term Note III, Term Note IV, Term Note V, Term Note VI, Term
Note VII, and Bridge Note I.
"Subsidiary" means any corporation of which more than fifty percent (50%)
of the outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether,
at the time, stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time, directly or indirectly, owned by the Borrower and/or one or more
Subsidiary or Affiliate.
"Tangible Net Worth" means, at any date, the excess, if any, of the
Borrower's total assets over the Borrower's total liabilities on such date,
excluding from total assets the aggregate amount carried as assets on the books
of the Borrower for goodwill, licenses, patents, trademarks, trade names
treasury stock, unamortized debt discount and expenses, copyrights, franchises,
organization
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costs, write-ups in the book value of the assets of the Borrower resulting from
a revaluation thereof, and any other intangible assets, all as determined in
accordance with GAAP.
"Term Loan I" means the loan evidenced by the Term Note I (No. 4550).
"Term Note I" means the note No. 4550, dated June 16, 1992, in the
original principal amount of Eighty Thousand Dollars ($80,000), made by the
Borrower payable to the order of the Lender, together with all extensions,
renewals, modifications, substitutions and changes in form thereof effected by
written agreement between the Borrower and the Lender.
"Term Loan II" means the loan evidenced by the Term Note II (No. 4560).
"Term Note II" means the note No. 4560, dated February 24, 1992, in the
original principal amount of One Hundred Fifty-Eight Thousand Three Hundred
Sixty-Eight and 78/100 Dollars ($158,368.78) made by the Borrower payable to the
order of the Lender, together with all extensions, renewals, modifications,
substitutions and changes in form thereof effected by written agreement between
the Borrower and the Lender.
"Term Loan III" means the loan evidenced by the Term Note III (No. 4910).
"Term Note III" means the note No. 4910, dated October 14, 1991, in the
original principal amount of Three Hundred Fifty Thousand Dollars ($350,000)
made by the Borrower payable to the order of the Lender, together with all
extensions, renewals, modifications, substitutions and changes in form thereof
effected by written agreement between the Borrower and the Lender.
"Term Loan IV" means the loan evidenced by the Term Note IV (No. 20020).
"Term Note IV" means the note No. 20020, dated January 29, 1996 in the
original principal amount of Eight Hundred Ninety-Eight Thousand Two Hundred
Dollars ($898,200) made by the Borrower payable to the order of the Lender,
together with all extensions, renewals, modifications, substitutions and changes
in form thereof effected by written agreement between the Borrower and the
Lender.
"Term Loan V" means the loan evidenced by the Term Note V (No. 24900).
"Term Note V" means the note Xx. 00000, dated October 18, 1996 in the
original principal amount of Three Hundred Fifty-Five Thousand Dollars
($355,000) made by the Borrower payable to the order of the Lender, together
with all extensions, renewals, modifications, substitutions and changes in form
thereof effected by written agreement between the Borrower and the Lender.
"Term Loan VI" means the loan evidenced by the Term Note VI (No. 27370).
"Term Note VI" means the note No. 27370, dated January 31, 1997 in the
original principal amount of One Million Eight Hundred Fifty-Five Thousand Seven
Hundred and Three Dollars ($1,855,703) made by the Borrower payable to the order
of the Lender, together with all extensions, renewals, modifications,
substitutions and changes in form thereof effected by written agreement between
the Borrower and the Lender.
"Term Loan VII" means the loan evidenced by the Term Note VII (No. 27380).
"Term Note VII" means the note No. 27380, dated January 31, 1997 in the
original principal amount of Two Million Five Hundred Fifty-Nine Thousand
Dollars ($2,559,000) made by the Borrower
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payable to the order of the Lender, together with all extensions, renewals,
modifications, substitutions and changes in form thereof effected by written
agreement between the Borrower and the Lender.
"Term Notes" means Term Note I (No. 4550), Term Note II (No. 4560), Term
Note III (No. 4910), Term Note IV (No. 20020), Term Note V (No. 24900), Term
Note VI (No. 27370) and Term Note VII (No. 27380).
"Termination Date" means the earlier of (a) June 1, 2000; or (b) the date
upon which the obligation of the Lender to make Advances is terminated pursuant
to Section 2.7 or Section 3.7 .
"Working Capital" means the Borrower's Current Assets minus its Current
Liabilities (other than deferred income taxes and any current portion of
liabilities otherwise included in the Current Liabilities).
2. THE SEASONAL LOAN I
2.1. Commitment for Seasonal Loan I. Subject to the Conditions of Lending
set forth in Section 14 hereof, the Lender agrees to make Advances under
Seasonal Loan I to the Borrower from time to time from the date of this
Credit Agreement through the Termination Date, provided, however, that the
Lender shall not be obligated to make any such Advance, if after giving
effect to such Advance, the aggregate outstanding principal amount of all
such Advances would exceed Fifteen Million Dollars ($15,000,000). Within
the limits set forth above, the Borrower may borrow, repay and reborrow
amounts under the Seasonal Note I.
2.2. The Seasonal Note I. All Advances shall be evidenced by, and the
Borrower shall repay such Advances to the Lender in accordance with, the
terms of the Seasonal Note I but in no event later than the date of
Maturity; including without limitation the provision of the Seasonal Note
I that the principal amount payable thereunder at any time shall not
exceed the then unpaid principal amount of all Advances under Seasonal
Loan I made by the Lender.
2.3. Records of Advances and Payments. The aggregate amount of all unpaid
Advances under Seasonal Loan I set forth on the records of the Lender
shall be rebuttable presumptive evidence of the principal amount owing and
unpaid on the Seasonal Note I.
2.4. Payments and Interest on the Seasonal Note I.
(a) Except to the extent any part thereof is a Fixed Rate Amount, the
Borrower agrees to pay interest on the outstanding principal amount
of the Seasonal Note I from the date hereof until paid in full at a
per annum rate equal to one-month LIBOR plus 250 basis points,
determined two (2) business days prior to the first business day of
any calendar week and fixed until the first business day of the
following calendar week.
(b) Interest accrued on the Seasonal Note I through Maturity shall be
payable for each month on the first (1st) day of the following
calendar month, commencing July 1, 1999, and at Maturity when the
entire outstanding principal amount shall be due and payable.
Interest accrued after Maturity shall be payable upon demand.
2.5. Manner of Borrowing. The Borrower shall give the Lender written or
telephonic notice of each requested Advance under Seasonal Loan I by not
later than 1:00 p.m. (Minneapolis time) on the date such Advance is to be
made. Each Advance under Seasonal Loan I shall be deposited to an account
designated by the Borrower or as otherwise indicated in the corresponding
request by the Borrower.
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2.6. Payments. Any other provision of this Credit Agreement to the
contrary notwithstanding, the Borrower shall make all payments of interest
on and principal of the Seasonal Note I to the Lender at its office shown
on the first page hereof (or to such other locations as may from time to
time be specified by the Lender).
2.7. Termination. The obligation of the Lender to make Advances under
Seasonal Loan I shall terminate:
(a) Upon receipt by the Lender of three (3) days' written notice of
termination from the Borrower given at any time when no amount is
outstanding under the Seasonal Note I;
(b) Immediately and without further action upon the occurrence of an
Event of Default of the nature referred to in Subsection 18.1(d) or
(c) Immediately when any Event of Default (other than one of the nature
specified in Subsection 18.1(d)) shall have occurred and be
continuing and either (i) the Lender shall have demanded payment of
the Seasonal Note I or (ii) the Lender shall elect by giving notice
to Borrower.
3. THE SEASONAL LOAN II
3.1. Commitment for Seasonal Loan II. Subject to the Conditions of Lending
set forth in Section 14 hereof, the Lender agrees to make Advances under
Seasonal Loan II to the Borrower from time to time from the date of this
Credit Agreement through the Termination Date, provided, however, that the
Lender shall not be obligated to make any such Advance, if after giving
effect to any such Advance, the aggregate outstanding principal amount of
all such Advances would exceed Five Million Dollars ($5,000,000). Within
the limits set forth above, the Borrower may borrow, repay and reborrow
amounts under the Seasonal Note II.
3.2. The Seasonal Note II. All Advances shall be evidenced by, and the
Borrower shall repay such Advances to the Lender in accordance with, the
terms of the Seasonal Note II but in no event later than the date of
Maturity; including without limitation the provision of the Seasonal Note
II that the principal amount payable thereunder at any time shall not
exceed the then unpaid principal amount of all Advances under Seasonal
Loan II made by the Lender.
3.3. Records of Advances and Payments. The aggregate amount of all unpaid
Advances set forth on the records of the Lender shall be rebuttable
presumptive evidence of the principal amount owing and unpaid on the
Seasonal Note II.
3.4. Payments and Interest on the Seasonal Note II.
(a) Except to the extent any part thereof is a Fixed Rate Amount, the
Borrower agrees to pay interest on the outstanding principal amount
of the Seasonal Note I from the date hereof until paid in full at a
per annum rate equal to one-month LIBOR plus 250 basis points,
determined two (2) business days prior to the first business day of
any calendar week and fixed until the first business day of the
following calendar week.
(b) Interest accrued on the Seasonal Note II through Maturity shall be
payable for each month on the first (1st) day of the following
calendar month, commencing July 1, 1999, and at Maturity when the
entire outstanding principal amount shall be due and payable.
Interest accrued after Maturity shall be payable upon demand.
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3.5. Manner of Borrowing. The Borrower shall give the Lender written or
telephonic notice of each requested Advance under Seasonal Loan II by not
later than 1:00 p.m. (Minneapolis time) on the date such Advance is to be
made. Each Advance under Seasonal Loan II shall be deposited to an account
designated by the Borrower or as otherwise indicated in the corresponding
request by the Borrower.
3.6. Payments. Any other provision of this Credit Agreement to the
contrary notwithstanding, the Borrower shall make all payments of interest
on and principal of the Seasonal Note II to the Lender at its office shown
on the first page hereof (or to such other locations as may from time to
time be specified by the Lender).
3.7. Termination. The obligation of the Lender to make Advances under
Seasonal Loan II shall terminate:
(a) Upon receipt by the Lender of three (3) days' written notice of
termination from the Borrower given at any time when no amount is
outstanding under the Seasonal Note II;
(b) Immediately and without further action upon the occurrence of an
Event of Default of the nature referred to in Subsection 18.1(d) or
(c) Immediately when any Event of Default (other than one of the nature
specified in Subsection 18.1(d)) shall have occurred and be
continuing and either (i) the Lender shall have demanded payment of
the Seasonal Note II or (ii) the Lender shall elect by giving notice
to Borrower.
4. THE TERM LOAN I
4.1. Term Loan. The Lender has previously made Term Loan I to the
Borrower, of which the principal amount of $5,197.55 is currently
outstanding.
4.2. Term Note I. To evidence the Term Loan I made by the Lender to the
Borrower hereunder, the Borrower has executed and delivered to the Lender
the Term Note I. The Borrower agrees to pay to the Lender amounts
outstanding under the Term Note I in installments as set forth in said
note, with all outstanding principal and accrued interest due and payable
October 1, 1999.
4.3. Payments and Interest on the Term Note I.
(a) Except to the extent any part thereof is a Fixed Rate Amount, the
Borrower agrees to pay interest on the unpaid principal balance of
the Term Note I outstanding from time to time at a rate per annum
equal to the Reference Rate.
(b) After the date hereof, the principal and accrued interest on the
amount outstanding under Term Note I through the end of each
calendar month hereafter shall be payable on the fifteenth (15th)
day following the end of each such calendar month in equal monthly
payments of $1,200 commencing June 15, 1999 and continuing on the
fifteenth (15th) day of each calendar month thereafter until October
1, 1999, when the entire amount of principal and interest shall be
due and payable in full. Lender shall have the right to adjust the
amount of such payments to maintain the original 7 year amortization
to the extent required by changes in the rate at which interest
accrues on Term Note I.
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5. TERM LOAN II
5.1. Term Loan II. The Lender has previously made Term Loan II to the
Borrower, of which the principal amount of $52,115.51 is currently
outstanding.
5.2. Term Note II. To evidence the Term Loan II made by the Lender to the
Borrower hereunder, the Borrower has executed and delivered to the Lender
the Term Note II. The Borrower agrees to pay to the Lender amounts
outstanding under the Term Note II in installments as set forth in said
note, with all outstanding principal and accrued interest due and payable
February 15, 2001.
5.3. Payments and Interest on the Term Note II.
(a) The Borrower agrees to pay interest on the unpaid principal balance
of the Term Note II outstanding from time to time at a fixed rate
equal to 9.90%.
(b) After the date hereof, the principal and accrued interest on the
amount outstanding under Term Note II through the end of each
calendar month hereafter shall be payable on the fifteenth (15th)
day following the end of each such calendar month in equal monthly
payments of $2,045 commencing June 15, 1999 and continuing on the
fifteenth (15th) day of each calendar month thereafter until
February 15, 2001, when the entire amount of principal and interest
shall be due and payable in full.
6. TERM LOAN III
6.1. Term Loan III. The Lender has previously made Term Loan III to the
Borrower, of which the principal amount of $115,814.39 is currently
outstanding.
6.2. Term Note III. To evidence the Term Loan III made by the Lender to
the Borrower hereunder, the Borrower has executed and delivered to the
Lender the Term Note III. The Borrower agrees to pay to the Lender amounts
outstanding under the Term Note III in installments as set forth in said
note, with all outstanding principal and accrued interest due and payable
October 1, 2001.
6.3. Payments and Interest on the Term Note III.
(a) The Borrower agrees to pay interest on the unpaid principal balance
of the Term Note III outstanding from time to time at a fixed rate
equal to 9.70%.
(b) After the date hereof, the principal and accrued interest on the
amount outstanding under Term Note III through the end of each
calendar month hereafter shall be payable on the fifteenth (15th)
day following the end of each such calendar month in equal monthly
payments of $4,567.33 commencing June 15, 1999 and continuing on the
fifteenth (15th) day of each calendar month thereafter until October
1, 2001, when the entire amount of principal and interest shall be
due and payable in full.
7. TERM LOAN IV
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7.1. Term Loan IV. The Lender has previously made Term Loan IV to the
Borrower, of which the principal amount of $796,923.53 is currently
outstanding.
7.2. Term Note IV. To evidence the Term Loan IV made by the Lender to the
Borrower hereunder, the Borrower has executed and delivered to the Lender
the Term Note IV. The Borrower agrees to pay to the Lender amounts
outstanding under the Term Note IV in installments as set forth in said
note, with all outstanding principal and accrued interest due and payable
February 1, 2006.
7.3. Payments and Interest on the Term Note IV.
(a) Except to the extent any part thereof is a Fixed Rate Amount, the
Borrower agrees to pay interest on the unpaid principal balance of
the Term Note IV outstanding from time to time at a rate per annum
equal to the Reference Rate.
(b) After the date hereof, the principal and accrued interest on the
amount outstanding under Term Note IV through the end of each
calendar month hereafter shall be payable on the fifteenth (15th)
day following the end of each such calendar month in equal monthly
payments of $8,370 commencing June 15, 1999 and continuing on the
fifteenth (15th) day of each calendar month thereafter until
February 1, 2006, when the entire amount of principal and interest
shall be due and payable in full. Lender shall have the right to
adjust the amount of such payments to maintain the original 15 year
amortization to the extent required by changes in the rate interest
accrues on Term Note IV.
8. TERM LOAN V
8.1. Term Loan V. The Lender has previously made Term Loan V to the
Borrower, of which the principal amount of $205,000.00 is currently
outstanding.
8.2. Term Note V. To evidence the Term Loan V made by the Lender to the
Borrower hereunder, the Borrower has executed and delivered to the Lender
the Term Note V. The Borrower agrees to pay to the Lender amounts
outstanding under the Term Note V in installments as set forth in said
note, with all outstanding principal and accrued interest due and payable
December 1, 2002.
8.3. Payments and Interest on the Term Note V.
(a) Except to the extent any part thereof is a Fixed Rate Amount, the
Borrower agrees to pay interest on the unpaid principal balance of
the Term Note V outstanding from time to time at a rate per annum
equal to the Reference Rate.
(b) After the date hereof, the principal and accrued interest on the
amount outstanding under Term Note V through the end of each
calendar quarter hereafter shall be payable on the fifteenth (15th)
day following the end of each such calendar quarter in equal
quarterly payments of $15,000 of principal, plus interest accrued
through such period, commencing August 15, 1999 and continuing on
the fifteenth (15th) day following each November, February, May and
August thereafter until December 1, 2002, when the entire amount of
principal and interest shall be due and payable in full.
9. TERM LOAN VI
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9.1. Term Loan VI. The Lender has previously made Term Loan VI to the
Borrower, of which the principal amount of $1,577,378.00 is currently
outstanding.
9.2. Term Note VI. To evidence the loan made by the Lender to the Borrower
hereunder, the Borrower has executed and delivered to the Lender the Term
Note. The Borrower agrees to pay to the Lender amounts outstanding under
the Term Note VI in installments as set forth in said note, with all
outstanding principal and accrued interest due and payable February 1,
2002.
9.3. Payments and Interest on the Term Note VI.
(a) Except to the extent any part thereof is a Fixed Rate Amount, the
Borrower agrees to pay interest on the unpaid principal balance of
the Term Note VI outstanding from time to time at a rate per annum
equal to the Reference Rate.
(b) After the date hereof, the principal and accrued interest on the
amount outstanding under Term Note VI through the end of each
quarterly period ending immediately prior to the following described
payment dates hereafter shall be payable on the fifteenth (15th) day
following the end of each such quarterly period in quarterly
payments of $30,925 of principal, plus interest accrued through such
period, commencing August 15, 1999 and continuing on the fifteenth
(15th) day of each of November, February, May and August thereafter
until February 1, 2002, when the entire amount of principal and
interest shall be due and payable in full.
10. TERM LOAN VII
10.1. Term Loan VII. The Lender has previously made Term Loan VII to the
Borrower, of which the principal amount of $1,407,450.00 is currently
outstanding.
10.2. Term Note VII. To evidence the loan made by the Lender to the
Borrower hereunder, the Borrower has executed and delivered to the Lender
the Term Note. The Borrower agrees to pay to the Lender amounts
outstanding under the Term Note VII in installments as set forth in said
note, with all outstanding principal and accrued interest due and payable
February 1, 2002.
10.3. Payments and Interest on the Term Note VII.
(a) Except to the extent any part thereof is a Fixed Rate Amount, the
Borrower agrees to pay interest on the unpaid principal balance of
the Term Note VII outstanding from time to time at a rate per annum
equal to the Reference Rate.
(b) After the date hereof, the principal and accrued interest on the
amount outstanding under Term Note VII through the end of each
quarterly period ending immediately prior to the following described
payment dates hereafter shall be payable on the fifteenth (15th) day
following the end of each such quarterly period in quarterly
payments of $127,950 of principal, plus interest accrued through
such period, commencing August 15, 1999 and continuing on the
fifteenth (15th) day of each of November, February, May and August
thereafter until February 1, 2002, when the entire amount of
principal and interest shall be due and payable in full.
11. BRIDGE LOAN I
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11.1. Bridge Loan. The Lender has made Bridge Loan I to the Borrower, in
the face amount of $5,000,000.00.
11.2. Bridge Note I. To evidence the Bridge Loan I made by the Lender to
the Borrower hereunder, the Borrower has executed and delivered to the
Lender the Bridge Note I. The Borrower agrees to pay to the Lender amounts
outstanding under the Bridge Note I in installments as set forth in said
note, with all outstanding principal and accrued interest due and payable
June 1, 1999.
11.3. Payments and Interest on the Bridge Note I.
(a) Except to the extent any part thereof is a Fixed Rate Amount, the
Borrower agrees to pay interest on the outstanding principal amount
of the Bridge Note I from the date hereof until paid in full at a
per annum rate equal to one-month LIBOR plus 275 basis points,
determined two (2) business days prior to the first business day of
any calendar week and fixed until the first business day of the
following calendar week.
(b) After the date hereof, the principal and accrued interest on the
amount outstanding under Bridge Note I through the end of each
quarterly period ending immediately prior to the following described
payment dates hereafter shall be payable on the first (1st) day
following the end of such quarterly period in quarterly payments of
$250,000.00 of principal, plus interest accrued through such period,
commencing August 1, 1999 and continuing on the first (1st) day of
each November, February, May and August thereafter until August 1,
2004, when the entire amount of principal and accrued interest shall
be due and payable in full.
12. GENERAL PROVISIONS
12.1. Computation of Interest.
(a) All computations of interest on the outstanding principal amount of
each Subject Note shall be computed on the basis of a year comprised
of 360 days to the extent such interest is computed based on LIBOR,
360 days to the extent such interest is computed based on the
Reference Rate, but charged for the actual number of days elapsed,
and such number of days as is indicated in the confirmation
described in Section 13.2 with respect to any Fixed Rate Amount.
Each change in the interest rate payable on each Subject Note due to
a change in the Reference Rate shall take place simultaneously with
the corresponding change in the Reference Rate. Whenever any payment
to be made by or to the Lender or other holder(s) of any Subject
Note shall otherwise be due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day, and
such extension of time shall be included in computing the fees or
interest payable on such next succeeding Business Day.
(b) No provision of this Credit Agreement or any Subject Note shall
require the payment or permit the collection of interest in excess
of the rate permitted by applicable law.
12.2. Default Rate; Late Payment. Notwithstanding anything to the contrary
herein, upon the occurrence and during the continuation of an Event of
Default, the Borrower shall pay interest on the outstanding principal
amount of each of the Subject Notes at a rate per annum equal to the
greater of (i) two percent (2%) in excess of the rate applicable to the
unpaid principal amount of each such Subject Note immediately before the
occurrence of such Event of Default or (ii) two
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percent (2%) in excess of the Reference Rate in effect from time to time.
In addition, the Borrower shall be obligated to pay $25.00 with respect to
any installment on any Subject Note paid after the date it is due, to
compensate Lender for the administrative expenses associated with such
past-due payments, subject to the maximum allowable late payment under
North Dakota law.
12.3. Security. The indebtedness, liabilities and other obligations of the
Borrower to the Lender under each Subject Note and this Credit Agreement
are secured by, inter alia, security interests granted pursuant to all
security interests, liens and mortgages heretofore or hereafter granted by
the Borrower to the Lender as security for the obligations to the Lender,
except that the Seasonal Notes I and II and the Letter of Credit Notes I
and II are not secured by any such collateral or agreements,
notwithstanding anything to the contrary therein.
12.4. Voluntary Prepayments. The Borrower may prepay the principal of any
of the Subject Notes, in whole or in part, only so long as (i) any such
prepayment is in a minimum amount of $100,000 or a multiple thereof; (ii)
any such prepayment shall be accompanied by the interest accrued on the
amount prepaid to the date of the prepayment; (iii) any such prepayment
shall be accompanied by the prepayment premium specified in, and computed
in accordance with, the provisions of Section 12.6 set forth below and
(iv) all amounts prepaid shall be applied in accordance with the terms of
such Subject Note.
12.5. Manner of Payments. Any other provision of this Credit Agreement to
the contrary notwithstanding, the Borrower shall make all payments of
interest on and principal of the Subject Notes to the Lender at its office
shown on the first page hereof.
12.6. Funding Losses; Prepayment Premiums.
(a) The Borrower hereby agrees that upon demand by the Lender (which
demand shall be accompanied by a statement setting forth the basis
for the calculations of the amount being claimed and the Lender's
calculation of the amount of such demand) the Borrower will
indemnify the Lender against any loss or expense which the Lender
may have sustained or incurred (including, without limitation, any
net loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Bank to
fund or maintain such loans) or which the Lender may be deemed to
have sustained or incurred, as reasonably determined by the Lender,
(i) as a consequence of any failure by the Borrower to make any
payment when due of any amount due hereunder in connection with any
such loans, (ii) due to any failure of the Borrower to borrow or
convert any such Loans accruing interest based on LIBOR or Fixed
Rate Amounts on a date specified therefor in a notice thereof or
(iii) due to any payment or prepayment of any such loans on a date
other than the last day of the applicable Interest Rate Period (if a
Fixed Rate Amount).
(b) If at the time of any prepayment of any Subject Note hereunder, the
Interest Differential is greater than zero, the Borrower shall pay
to the Lender a prepayment premium equal to the present value
(discounted from the previously scheduled payment dates for interest
on the Loan at a rate equal to the Government Yield with respect to
such Loan on the date of prepayment plus the Issuance Spread) of the
product of (a) the Interest Differential, times (b) the amount
prepaid, times (c) a fraction, the numerator of which is the number
of days scheduled to fall between the interest payment dates on the
Loan and the denominator of which is 365. If the portion prepaid
covers several installments, the Lender may, at its option, either
calculate such payment for each installment or calculate such
payment based on the weighted average maturity of the portion
prepaid.
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12.7. Increased Costs. If any Regulatory Change or other change in any
existing law, rule or regulation or in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency shall subject the Lender or one or more of its sources
of financing to increased costs, the Borrower shall pay to the Lender
within fifteen (15) days of demand therefor, Borrower's pro rata share
(based on the amount of all loans outstanding from the Lender) of any such
amount required to compensate the Lender or such other Persons for such
costs.
12.8. Collateral Allocation. To the extent the Lender receives proceeds of
any Collateral after the exercise of remedies provided for in Section
18.2: (a) proceeds of accounts and inventory shall be applied first to any
obligations of the Borrower relating to or arising under the Seasonal
Notes and Loans I and II, pro rata in accordance with the principal amount
outstanding thereunder and then to all the other obligations to the Lender
under the Loan Documents; (b) proceeds of each of the Mortgages shall be
applied first to any obligations of the Borrower relating to or arising
under each of the Term Notes and corresponding Term Loans referenced as
expressly secured thereby in the definition of the term "Mortgages" herein
(the "Mortgage Secured Notes and Loans"), and then to all other
obligations to the Lender under the Loan Documents; and (c) proceeds of
all other Collateral shall be applied first to all the obligations of the
Borrower to the Lender under the Loan Documents, other than those relating
to or arising under the Seasonal Notes and Loans or the Mortgage Secured
Notes and Loans, and then to all other obligations to the Lender under the
Loan Documents, pro rata in accordance with the respective principal
amounts thereof.
12.9. Loan Agreement Reference. Any reference in any Subject Note to any
Loan Agreement or Credit Agreement shall be deemed to be a reference to
this Credit Agreement, as it may from time to time be amended, modified,
supplemented or restated. Any conflict between the terms of any Subject
Note, and the terms of this Credit Agreement, shall be resolved in favor
of the terms of this Credit Agreement.
13. FIXED RATE AMOUNTS
13.1. Availability. Any Fixed Rate Amount of any Loan may bear interest at
a Fixed Rate. A Loan may accrue a different Fixed Rate on different Fixed
Rate Amounts simultaneously. A Fixed Rate shall be effective to the extent
the Lender responds to any request therefor by the Borrower prior to the
date such Fixed Rate is to first accrue.
13.2. Confirmation. The Lender shall confirm any Fixed Rate to the
Borrower in writing which shall reference and confirm:
(a) The applicable Subject Note number;
(b) The applicable Fixed Rate Amount;
(c) The applicable Fixed Rate;
(d) The applicable date such Fixed Rate becomes effective;
(e) The number of days which will comprise the year over which such
Fixed Rate is to be computed; and
(f) The date upon which such Fixed Rate expires.
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13.3. Rate After Interest Rate Period. Interest on any Fixed Rate Amount
shall accrue at the rate otherwise provided for hereunder commencing the
date following the last day of the corresponding Interest Rate Period,
which may, if the Borrower has appropriately requested and the Lender has
quoted, be a new Fixed Rate.
14. CONDITIONS OF LENDING
14.1. Conditions Precedent. This Credit Agreement and the Lender's
obligations hereunder are subject to receipt on or prior to the date
hereof, by the Lender of the following, each to be in form and substance
satisfactory to the Lender, unless the Lender waives receipt of any of the
following in writing:
(a) This Credit Agreement and the Subject Notes each appropriately
completed and duly executed by the Borrower;
(b) A Certificate of Good Standing for the Borrower issued by the
Secretary of State in all states where the Borrower is qualified to
do business;
(c) A copy of the Borrower's Bylaws, together with all amendments,
certified by the Secretary of the Borrower to be a true and correct
copy thereof;
(d) A copy of the Certificate of Incorporation of the Borrower, together
with all amendments, certified by the Secretary of State of the
state of the Borrower's incorporation to be a true and correct copy
thereof;
(e) A certified copy of the resolutions of the Board of Directors of the
Borrower authorizing or ratifying the transactions contemplated
hereby, and the execution, delivery and performance of the Loan
Documents, and designating the officers authorized to execute the
Loan Documents to which the Borrower is a party and to perform the
obligations of the Borrower thereunder;
(f) A certificate of the Secretary of the Borrower certifying the names
of the officers authorized to execute the Loan Documents, together
with a sample of the true signature of each such officer;
(g) A favorable opinion of counsel for the Borrower, satisfactory to the
Lender, as to the matters set forth in Subsections 16.1, 16.2, 16.3,
16.5, 16.7 and 16.9 (delivered not later than December 1, 1999), and
other matters as requested by the Lender, satisfactory to the Lender
and its counsel;
(h) The Security Agreement and Mortgages duly executed by the Borrower;
(i) Policies or certificates of insurance evidencing insurance coverage
required under this Credit Agreement and any other of the Loan
Documents; and
(j) Such other documents, information and actions as the Lender may
reasonably request.
14.2. Conditions Precedent to all Loans and Advances. The obligation of
the Lender to make any Loan or Advance hereunder, including the initial
Loans and Advances, is subject to the satisfaction of each of the
following, unless waived in writing by the Lender:
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(a) The representations and warranties set forth in Section 15 are true
and correct in all material respects on the date hereof and on the
date of any Loan or Advance (as if made on the date of such Loan or
Advance, except to the extent that such representations and
warranties expressly relate solely to an earlier date).
(b) No Default or Event of Default shall have occurred and be
continuing.
(c) No litigation, arbitration or governmental investigation or
proceeding shall be pending, or, to the knowledge of the Borrower,
threatened, against the Borrower or affecting the business or
operations of the Borrower which was not previously disclosed to the
Lender and which, if determined adversely to the Borrower, would
have a material adverse effect on the operation or financial
condition of the Borrower.
(d) No Default or Event of Default shall result from the making of any
such Loan or Advance.
(e) No Material Adverse Occurrence shall have occurred and be
continuing.
(f) Each request for a Loan or Advance and each acceptance of the
proceeds of such request by the Borrower shall constitute a
representation and warranty by the Borrower that on the date of
acceptance of such proceeds (both immediately before and after
giving effect to such acceptance) the statements made in Section 15
are true and correct with the same effect as if then made, except to
the extent such statements expressly relate solely to an earlier
date.
15. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender as follows:
15.1. Organization, etc. The Borrower is a corporation validly organized
and existing and in good standing under the laws of the State of Delaware,
has full power and authority to own its property and conduct its business
substantially as presently conducted by it and is duly qualified and
licensed to do business and is in good standing as a foreign corporation
in each other jurisdiction where the nature of its business makes such
qualification or licensing necessary. The Borrower has full power and
authority to enter into and perform its obligations under the Loan
Documents and to obtain the loans and Advances hereunder.
15.2. Due Authorization. The execution, delivery and performance by the
Borrower of the Loan Documents have been duly authorized by all necessary
corporate action, do not require any approval or consent of, or any
registration, qualification or filing with, any governmental agency or
authority or any approval or consent of any other Person (including,
without limitation, any stockholder), do not and will not conflict with,
result in any violation of or constitute any default under, any provision
of the Borrower's Articles of Incorporation or Bylaws, any agreement
binding on or applicable to the Borrower or any of its property, or any
law or governmental regulation or court decree or order, binding upon or
applicable to the Borrower or of any of its property and will not result
in the creation or imposition of any Lien on any of its property pursuant
to the provisions of any agreement binding on or applicable to the
Borrower or any of its property except pursuant to the Loan Documents.
15.3. Validity of the Loan Documents. The Loan Documents to which the
Borrower is a party are the legal, valid and binding obligations of the
Borrower and are enforceable in accordance with their terms, subject only
to bankruptcy, insolvency, reorganization, moratorium or similar laws,
17
rulings or decisions at the time in effect affecting the enforceability of
rights of creditors generally and to general equitable principles which
may limit the right to obtain equitable remedies.
15.4. Financial Information. The financial statements of the Borrower
furnished to the Lender have been and will be prepared in accordance with
GAAP consistently applied by the Borrower and present fairly the financial
condition of the Borrower as of the dates thereof and for the periods
covered thereby. The Borrower is not aware of any contingent liabilities
or obligations which would, upon becoming non-contingent liabilities or
obligations, be a Material Adverse Occurrence. Since the date of the most
recent such statements, neither the condition (financial or otherwise),
the business nor the properties of the Borrower have been materially and
adversely affected in any way.
15.5. Litigation, Other Proceedings. Except as previously disclosed to and
approved of in writing by the Lender, there is no action, suit or
proceeding at law or equity, or before or by any governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
pending or, to the knowledge of the Borrower, threatened, against the
Borrower or any of its property, which is reasonably likely to result in a
Material Adverse Occurrence; and the Borrower is not in default with
respect to any final judgment, writ, injunction, decree, rule or
regulation of any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, where such default
would be a Material Adverse Occurrence.
15.6. Title to Assets. Except for Liens permitted by Section 17.2, the
Borrower has good and marketable title to all of its assets, real and
personal.
15.7. Lien Priority. The Liens created by the Security Agreement are
attached and first, perfected Liens on the Collateral.
15.8. Guarantees and Indebtedness. Except as disclosed on financial
statements of the Borrower furnished to the Lender, the Borrower is not a
party to any material contract of guaranty or suretyship and none of its
assets is subject to any contract of that nature and the Borrower is not
indebted to any other party, except the Lender.
15.9. Margin Stock. No part of any loan or Advance hereunder shall be used
at any time by the Borrower to purchase or carry margin stock (within the
meaning of Regulation G, T, U or X promulgated by the Board of Governors
of the Federal Reserve System) or to extend credit to others for the
purpose of purchasing or carrying any margin stock. The Borrower is not
engaged principally, or as one of its important activities, in the
business of extending credit for the purposes of purchasing or carrying
any such margin stock. No part of the proceeds of any loan or Advance
hereunder will be used by the Borrower for any purpose which violates, or
which is inconsistent with, any regulations promulgated by the Board of
Governors of the Federal Reserve System.
15.10. Taxes. The Borrower has filed all federal, state and other income
tax returns which are required to be filed through the date of this Credit
Agreement and has paid all taxes as shown on said returns, and all taxes
due or payable without returns and all assessments received to the extent
such taxes and assessments have become due. All tax liabilities of the
Borrower are adequately provided for on its books, including interest and
penalties. No income tax liability of a material nature has been asserted
by taxing authorities for taxes in excess of those already paid. The
Borrower has made all required withholding deposits.
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15.11. Accuracy of Information. All factual information furnished by or on
behalf of the Borrower to the Lender for purposes of or in connection with
this Credit Agreement or any transaction contemplated by this Credit
Agreement is, and all other such factual information furnished by or on
behalf of the Borrower to the Lender in the future, will be true and
accurate in every material respect on the date as of which such
information is dated or certified. No such information contains any
material misstatement of fact or omits any material fact or any fact
necessary to prevent such information from being misleading.
15.12. Material Agreements. The Borrower is not a party to any agreement
or instrument or subject to any restriction that materially and adversely
affects its business, property or assets, operations or condition
(financial or otherwise).
15.13. Defaults. The Borrower is not in default in the performance,
observance or fulfillment of any of the obligations, covenants or
conditions contained in any: (a) agreement to which such entity is a
party, which default might have a material adverse effect on the business,
properties or assets, operations, or condition (financial or otherwise) of
the Borrower; or (b) instrument evidencing any indebtedness or under any
agreement relating to such indebtedness.
15.14. ERISA. (a) No Reportable Event has occurred and is continuing with
respect to any Plan; (b) the Pension Benefit Guaranty Corporation or any
successor entity has not instituted proceedings to terminate any Plan; and
(c) each Plan of the Borrower has been maintained and funded in all
material respects in accordance with its terms and with ERISA. All
undefined capitalized terms used in this Section shall have the meanings
ascribed to them in ERISA.
15.15. Financial Status. The Borrower is not insolvent (as such term is
defined in Section 101(32) of the United States Bankruptcy Code of 1978,
as amended or Minnesota Statutes Section 513.42, as amended) and will not
be rendered insolvent (as such term is defined in Section 101(32) of the
United States Bankruptcy Code of 1978, as amended or Minnesota Statutes
Section 513.42, as amended) by execution of this Credit Agreement or any
other of the Loan Documents, or consummation of the transactions
contemplated thereby.
15.16. Survival of Representations. All representations and warranties
contained in this Section 15 shall survive the delivery of the Notes and
the making of the loans and Advances evidenced thereby and any
investigation at any time made by or on behalf of Lender shall not
diminish its rights to rely thereon.
15.17. Environmental Matters.
(a) Definitions. As used in this Credit Agreement, the following terms
shall have the following meanings:
(i) "Environmental Law" means any federal, state, local or other
governmental statute, regulation, law or ordinance dealing
with the protection of human health and the environment.
(ii) "Hazardous Substances" means pollutants, contaminants,
hazardous substances, hazardous wastes, petroleum and
fractions thereof, and all other chemicals, wastes, substances
and materials listed in, regulated by or identified in any
Environmental Law.
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(iii) "Premises" means all premises where the Borrower conducts its
business and has any rights of possession.
(b) To the Borrower's best knowledge, there are not present in, on or
under the Premises any Hazardous Substances in such form or quantity
as to create any liability or obligation for either the Borrower or
the Lender under common law of any jurisdiction or under any
Environmental Law, and no Hazardous Substances have ever been
stored, buried, spilled, leaked, discharged, emitted or released in,
on or under the Premises in such a way as to create any such
liability.
(c) There are not and there never have been any requests, claims,
notices, investigations, demands, administrative proceedings,
hearings or litigation, relating in any way to the Premises or the
Borrower, alleging liability under, violation of, or noncompliance
with any Environmental Law or any license, permit or other
authorization issued pursuant thereto. To the Borrower's best
knowledge, no such matter is threatened or impending.
(d) To the Borrower's best knowledge, the Premises are not and never
have been listed on the National Priorities List, the Comprehensive
Environmental Response, Compensation and Liability Information
System or any similar federal, state or local list, schedule, log,
inventory or database.
15.18. Subsidiaries. The Borrower has the Subsidiaries listed on the
financial statements previously delivered to the Lender.
16. AFFIRMATIVE COVENANTS
As long as there remains any amount outstanding under the Subject Notes or
the Lender has any obligation to make Advances under the Seasonal Commitment,
the Borrower shall, unless waived in writing by the Lender:
16.1. Financial Statements and Reports. Furnish to the Lender, at the
times set forth below, the following financial statements, reports and
information:
(a) As soon as available, but in any event within one hundred twenty
five (125) days after each fiscal year end, audited financial
statements of the Borrower, and all corporations and subsidiaries,
directly or indirectly controlled by the Borrower, including without
limitation a balance sheet, and the related statements of income,
retained earnings and cash flows, prepared on a consolidated and
consolidating basis certified by certified public accountants
satisfactory to the Lender to have been prepared in accordance with
GAAP consistently applied;
(b) As soon as available, but in any event within forty-five ( 45) days
after the last day of each quarterly fiscal period unaudited
financial statements of the Borrower consisting of a balance sheet
and the related statements of income, retained earnings and cash
flows prepared on a consolidated and consolidating basis dated as of
the last Business Day of such quarterly fiscal period in form and
detail as reasonably required by the Lender certified by the chief
financial officer of the Borrower to have been prepared from the
records of the Borrower on the basis of accounting principles
consistently applied by the Borrower;
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(c) As soon as available, but in any event within ninety (90) days
following each fiscal year-end, an operating budget and cash flow
forecast for the fiscal year immediately following such fiscal
year-end.
(d) Promptly upon obtaining knowledge thereof, notice of the occurrence
of any Default or Event of Default and of the violation by the
Borrower of any law, rule or regulation, the non-compliance with
which could be reasonably expected to be a Material Adverse
Occurrence;
(e) To the extent applicable, promptly after the sending or filing
thereof, copies of all regular and periodic financial reports which
the Borrower shall file with the U.S. Securities and Exchange
Commission, or any national securities exchange;
(f) Such other information concerning the business, operations and
condition (financial or otherwise) of the Borrower as the Lender may
reasonably request.
16.2. Maintenance of Corporate Existence. Maintain and preserve its
corporate existence.
16.3. Taxes. Pay and discharge as the same shall become due and payable,
all taxes, assessments and other governmental charges and levies against
or on any of its property, as well as claims of any kind which, if unpaid,
might become a Lien upon any of its properties, unless such tax, levy,
charge assessment or Lien is being contested in good faith by the Borrower
and is supported by an adequate book reserve. The Borrower shall make all
required withholding deposits.
16.4. Notices. As soon as practicable, give notice to the Lender of:
(a) The commencement of any litigation relating to the Borrower which
might reasonably result in a Material Adverse Occurrence or relating
to the transactions contemplated by this Credit Agreement;
(b) The commencement of any material arbitration or governmental
proceeding or investigation not previously disclosed to the Lender
which has been instituted or, to the knowledge of the Borrower, is
threatened against the Borrower or its property which might
reasonably result in a Material Adverse Occurrence;
(c) Any Reportable Event or "prohibited transaction" or the imposition
of a Withdrawal Liability, within the meaning of ERISA, in
connection with any Plan and, when known, any action taken by the
Internal Revenue Service, Department of Labor or Pension Benefit
Guaranty Corporation with respect thereto, and any adverse
development which occurs in any litigation, arbitration or
governmental investigation or proceeding previously disclosed to the
Lender which if determined adversely to the Borrower would
constitute a Material Adverse Occurrence; and
(d) Any Default or Event of Default under this Credit Agreement.
16.5. Compliance with Laws. Carry on its business activities in
substantial compliance with all applicable federal or state laws and all
applicable rules, regulations and orders of all governmental bodies and
offices having power to regulate or supervise its business activities. The
Borrower shall maintain all material rights, liens, franchises, permits,
certificates of compliance or grants of authority required in the conduct
of its business. Without limiting the foregoing undertakings, the
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Borrower specifically agrees that it will comply with all applicable
Environmental Laws and obtain and comply with all permits, licenses and
similar approvals required by any Environmental laws, and will not
generate, use, transport, treat, store or dispose of any Hazardous
Substances in such a manner as to create any liability or obligation under
the common law of any jurisdiction or any Environmental Law.
16.6. Books and Records. Keep books and records reflecting all of its
business affairs and transactions in accordance with GAAP consistently
applied and permit the Lender, and its representatives, at reasonable
times and intervals, to visit all of its offices, discuss its financial
matters with officers of the Borrower and its independent public
accountants (and by this provision the Borrower authorizes its independent
public accountants to participate in such discussions) and examine any of
its books and other corporate records.
16.7. Insurance. Procure and maintain insurance with financially sound and
reputable insurers, insurance with respect to the Collateral and its other
property against damage and loss by theft, fire, collision (in the case of
motor vehicles) and such other risks as are required by the Lender in an
amount equal to the fair market value thereof and, in any event, in an
amount sufficient to avoid the application of any coinsurance provisions
and naming the Lender loss payee. The Borrower shall also procure and
maintain other such insurance including workers compensation insurance,
liability and business interruption insurance, and other insurance as the
Lender may require and/or that may be required under any of the Loan
Documents, all in such amounts as may be required by the Lender. Policies
of all such insurance shall contain an agreement by the insurer to provide
the Lender thirty (30) days prior written notice of cancellation and an
agreement that the Lender's interest shall not be impaired or invalidated
by any act or neglect of the Borrower nor by the occupation of properties
owned or leased by the Borrower or other properties wherein the Collateral
is located for purposes more hazardous than those permitted by such
policies. The Borrower shall provide evidence of such insurance and the
policies of insurance or copies thereof to the Lender upon request.
16.8. Maintain Property. Maintain and keep its assets, property and
equipment in good repair, working order and condition and from time to
time make or cause to be made all needed renewals, replacements and
repairs.
16.9. Conduct of Business. Continue to engage primarily in the business
being conducted on the date of this Credit Agreement.
16.10. Coverage Ratio. Maintain as of each fiscal quarter end a Coverage
Ratio not to exceed 5.5 : 1.0 through the period ending 10/31/99. Maintain
as of each fiscal quarter end a Coverage Ratio not to exceed 5.0 : 1.0
beyond 10/31/99.
16.11. Leverage Ratio. Maintain as of each fiscal quarter end a Leverage
Ratio of not to exceed 5.0 : 1.0 through the period ending 10/31/99.
Maintain as of each fiscal quarter end a Leverage Ratio of not to exceed
4.5 : 1.0 beyond 10/31/99.
16.12. Further Assurances. The Borrower agrees upon reasonable request by
the Lender to execute and deliver such further instruments, deeds and
assurances, including financing statements under the Uniform Commercial
Code of Minnesota and/or any other relevant states, and to do such further
acts as may be necessary or proper to carry out more effectively the
purposes of this Credit Agreement and the Loan Documents and, without
limiting the foregoing, to make subject to the liens and security
interests of the Security Agreement and any other of the Loan Documents
any
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property agreed to be subjected, or intended to be subject, or covered by
the granting clauses of the Security Agreement or such other of the Loan
Documents.
16.13. ERISA Compliance. Comply in all material respects at all times with
all applicable provisions of ERISA and the regulations and published
interpretations thereunder.
17. NEGATIVE COVENANTS
As long as there remains any amount outstanding under the Subject Notes or
the Lender has any obligation to make Advances under the Seasonal Loan
Commitment, the Borrower shall not, unless waived in writing by the Lender:
17.1. Consolidation; Merger; Sale of Assets; Acquisitions. Consolidate
with or merge into or with any other entity; or sell (other than sales of
inventory in the ordinary course of business), transfer, lease or
otherwise dispose of all or a substantial part of its assets; or acquire a
substantial interest in another Person either through the purchase of all
or substantially all of the assets of that Person or the purchase of a
controlling equity interest in that Person; provided that the foregoing
shall not prohibit any transaction immediately after which:
(a) The Borrower is a surviving entity;
(b) Borrower's Tangible Net Worth is not less than the amount thereof
immediately prior thereto; and
(c) The aggregate price paid by the Borrower in all such transactions in
any consecutive twelve (12) month period is not greater than
$100,000,000;
17.2. Liens. Create, incur, assume or suffer to exist any Lien or any of
its property, real or personal, except (a) Liens in favor of the Lender;
(b) Liens disclosed to and approved of in writing by the Lender; (c) Liens
for current taxes and assessments which are not yet due and payable; and
(d) purchase money security interests to secure the indebtedness permitted
under Section 17.3 below.
17.3. Additional Indebtedness. Create, incur, assume or suffer to exist
any indebtedness except: (a) indebtedness in favor of the Lender; (b)
current liabilities incurred in the ordinary course of business; (c)
indebtedness existing on the date of this Credit Agreement and disclosed
to and approved of in writing by the Lender; and (d) purchase money
indebtedness incurred in connection with the acquisition of fixed assets
not to exceed $1,000,000 in the aggregate during any fiscal year of the
Borrower.
17.4. Guaranties. Assume, guarantee, endorse or otherwise become liable in
connection with the indebtedness of any other person or entity except
endorsements of negotiable instruments for deposit or collection in the
ordinary course of business.
17.5. Dividends. Declare or pay any dividends, purchase, redeem, retire or
otherwise acquire for value any of its capital stock now or hereafter
outstanding, return any capital to its stockholders as such, at any time
any Default or Event of Default has occurred and is continuing.
17.6. Change in Ownership or Business. Permit (a) Change of control, or
(b) change in the line of business presently engaged in by the Borrower.
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17.7. Investments; Subsidiaries. The Borrower will not purchase or hold
beneficially any stock or other securities or evidences of indebtedness
of, make or permit to exist any loans or advances to, or create or acquire
any Subsidiary or make any investment or acquire any interest whatsoever
in, any other Person, except:
(a) Investments in direct obligations of the United States of America or
any agency or instrumentality thereof whose obligations constitute
the full faith and credit obligations of the United States of
America having a maturity of one (1) year or less, commercial paper
issued by a U.S. corporation rated "A-1" or "A-2" by Standard &
Poor's Corporation or "P-1" or "P-2" by Xxxxx'x Investor Service,
investments in money market mutual funds whose underlying assets are
exclusively investments which would otherwise be permitted
investments under this Section 17.7(a), or repurchase agreements,
certificates of deposit or bankers' acceptances having a maturity of
one (1) year or less issued by members of the Federal Reserve System
having deposits in excess of $500,000,000 (which certificates of
deposit or bankers' acceptances are fully insured by the Federal
Deposit Insurance Corporation);
(b) Travel advances or loans to officers and employees of the Borrower
(not including contracts made in the ordinary course of business
with any such officers or employees) not exceeding at any one time
an aggregate of $25,000;
(c) Advances in the form of progress payments, prepaid rent or security
deposits;
(d) Existing investments as described in the Borrower's financial
statements;
(e) Investments constituting contracts made in the ordinary course of
business of the Borrower;
(f) Investments in wholly-owned subsidiaries of the Borrower existing as
of the date hereof;
(g) Transitions and investments permitted under Section 17.1; and
(h) Investments not otherwise permitted in this Section 17.7 not to
exceed $1,000,000 in the aggregate (on a book value basis) at any
time outstanding.
18. EVENTS OF DEFAULT AND REMEDIES
18.1. Events of Default. The term "Event of Default" shall mean any of the
following events:
(a) The Borrower shall default in the payment when due, or if payable on
demand, upon demand, of any principal or interest on any of the
Subject Notes; or
(b) The Borrower shall default (other than a default in payment under
subsection (a) above) in the due performance and observance of any
of the covenants contained in any of the Loan Documents and such
default shall continue unremedied for a period of thirty (30) days
after notice from the Lender to the Borrower thereof; or
(c) An event has occurred which would, at such time or with the passage
of time, constitute an "event of default" (however legally styled)
under any other loan obligation, lease, bond, debenture, security
agreement, note, or instrument or agreement evidencing Debt and any
applicable grace period specified in such agreement or evidence of
Debt has expired; or
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(d) The Borrower shall become insolvent or generally fail to pay or
admit in writing its inability to pay its debts as they become due;
or the Borrower shall apply for, consent to, or acquiesce in the
appointment of a trustee, receiver or other custodian for itself or
any of its property, or make a general assignment for the benefit of
its creditors; or trustee, receiver or other custodian shall
otherwise be appointed for the Borrower or any of its assets; or any
bankruptcy, reorganization, debt arrangement, or other case or
proceeding under any bankruptcy or insolvency law, or any
dissolution or liquidation proceeding shall be commenced by or
against the Borrower; or the Borrower shall take any action to
authorize, or in furtherance of, any of the foregoing; or
(e) Any representation or warranty set forth in this Credit Agreement or
any other Loan Document shall be untrue in any material respect on
the date as of which the facts set forth are stated or certified; or
(f) The occurrence of any Material Adverse Occurrence; or
(g) A Reportable Event (as defined under ERISA) shall have occurred; or
(h) The rendering against the Borrower of a final judgment, decree or
order for the payment of money in excess of $500,000 (unless the
payment of such judgment in the amount of such excess is insured),
and the continuance of such judgment, decree or order unsatisfied
for any 30 consecutive day period without a stay of execution.
(i) The occurrence of a Change of Control; or
(j) The Lender shall in good xxxxx xxxx itself insecure.
18.2. Remedies; Cumulative. If an Event of Default described in Section
18.1(d) shall occur, the full unpaid balance of each of the Subject Notes
(outstanding balance plus accrued interest) and all other obligations of
the Borrower to the Lender shall automatically be due and payable without
declaration, notice, presentment, protest or demand of any kind (all of
which are hereby expressly waived) and the obligation of the Lender to
make additional Advances shall automatically terminate. If any other Event
of Default shall occur and be continuing, the Lender may terminate its
obligation to make additional Advances and may declare the outstanding
balance of the each of the Subject Notes and all other obligations of the
Borrower to the Lender to be due and payable without further notice,
presentment, protest or demand of any kind (all of which are hereby
expressly waived), whereupon the full unpaid amount of each of the Subject
Notes and all other obligations of the Borrower to the Lender shall become
immediately due and payable. Upon any Event of Default, the Lender shall
be entitled to exercise any and all rights and remedies available under
any of the Loan Documents or otherwise available at law or in equity to
collect the Subject Notes and all other obligations of the Borrower to the
Lender, to realize upon or otherwise pursue any and all Collateral and
other security (including without limitation any and all guarantees) for
the loans under this Credit Agreement and to, without notice to the
Borrower, and without further action, apply any and all monies owing by
Lender to the Borrower to the payment of the Subject Notes, and all other
obligations of the Borrower hereunder, in such order as the Lender elects
(subject to Section 12.8).
19. MISCELLANEOUS
19.1. Waivers, Amendments. The provisions of the Loan Documents may from
time to time be amended, modified, or waived, if such amendment,
modification or waiver is in writing and signed
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by the Lender. No failure or delay on the part of the Lender or the
holder(s) of the Subject Notes in exercising any power or right under any
of the Loan Documents shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other
or further exercise thereof or the exercise of any other power or right.
No notice to or demand on the Borrower in any case shall entitle it to any
notice or demand in similar or other circumstances.
19.2. Notices. All communications and notices provided under this Credit
Agreement shall be in writing and addressed or delivered to the Borrower
or the Lender at their respective addresses shown on the first page
hereof, or to any party at such other address as may be designated by such
party in a written notice to the other parties. Such notices shall be
delivered by any of the following means: (i) mailing through the United
States Postal Service, postage prepaid, by registered or certified mail,
return receipt requested; (ii) delivery by reputable overnight delivery
service including without limitation, and by way of example only: Federal
Express, DHL, Airborne Express and Express Mail; or (iii) delivery by
reputable private personal delivery service. Notices delivered in
accordance with (i) above shall be deemed delivered the second Business
Day after deposit in the mail; notices delivered in accordance with (ii)
above shall be deemed delivered the first Business Day after delivery to
the delivery service; and notices delivered in accordance with (iii) above
shall be deemed delivered the same Business Day as that specified by the
notifying party to the delivery service.
19.3. Costs and Expenses. The Borrower agrees to pay all expenses for the
preparation of this Credit Agreement, including exhibits, and any
amendments to this Credit Agreement as may from time to time hereafter be
required, and the reasonable attorneys fees and legal expenses of counsel
for the Lender, from time to time incurred in connection with the
preparation and execution of this Credit Agreement and any document
relevant to this Credit Agreement, any amendments hereto or thereto, and
the consideration of legal questions relevant hereto and thereto. The
Borrower agrees to reimburse Lender upon demand for, all out-of-pocket
expenses (including reasonable attorneys fees and legal expenses) in
connection with the Lender's enforcement of the obligations of the
Borrower hereunder or under the Note or any other of the Loan Documents,
whether or not suit is commenced including, without limitation, attorneys
fees, and legal expenses in connection with any appeal of a lower court's
order or judgment. The obligations of the Borrower under this Section 19.3
shall survive any termination of this Credit Agreement.
19.4. Interest Limitation. All agreements between the Borrower and the
Lender are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the
indebtedness evidenced or secured thereby or otherwise, shall the rate of
interest charged or agreed to be paid to the Lender for the use,
forbearance, loaning or detention of such indebtedness exceed the maximum
permissible interest rate under applicable law ("Maximum Rate"). If for
any reason or in any circumstance whatsoever fulfillment of any provision
of this Credit Agreement and/or the Subject Notes, any document securing
or executed in connection herewith or therewith, or any other agreement
between the Borrower and the Lender, at any time shall require or permit
the interest rate applied thereunder to exceed the Maximum Rate, then the
interest rate shall automatically be reduced to the Maximum Rate, and if
the Lender should ever receive interest at a rate that would exceed the
Maximum Rate, the amount of interest received which would be in excess of
the amount receivable after applying the Maximum Rate to the balance of
the outstanding obligation shall be applied to the reduction of the
principal balance of the outstanding obligation for which the amount was
paid and not to the payment of interest thereunder. This provision shall
control every other provision of any and all agreements between the
Borrower and the Lender and shall also be binding upon and applicable to
any subsequent holder of any of the Subject Notes.
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19.5. Severability. Any provision of this Credit Agreement or any other of
the Loan Documents executed pursuant hereto which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such portion or unenforceability without
invalidating the remaining provisions of this Credit Agreement or such
Loan Document or affecting the validity or enforceability of such
provisions in any other jurisdiction.
19.6. Cross-References. References in this Credit Agreement or in any
other of the Loan Documents executed pursuant hereto to any Section are,
unless otherwise specified, to such Section of this Credit Agreement or
such Loan Document, as the case may be.
19.7. Headings. The various headings of this Credit Agreement or of any
other of the Loan Documents executed pursuant hereto are inserted for
convenience only and shall not affect the meaning or interpretation of
this Credit Agreement or such Loan Document or any provisions hereof or
thereof.
19.8. Governing Law; Venue; Waiver of Jury Trial. Each of the Loan
Documents shall be deemed to be a contract made under and governed by the
laws of the State of North Dakota (without regard to the laws of conflict
of any jurisdiction) as to all matters, including without limitation,
matters of validity, interpretation, construction, effect, performance and
remedies. The Borrower hereby consents to the personal jurisdiction of the
state and federal courts located in the State of North Dakota in
connection with any controversy related to this Credit Agreement and any
other of the Loan Documents, waives any argument that venue in such forums
is not convenient and agrees that any litigation instigated by the
Borrower against the Lender in connection herewith or therewith shall be
venued in the federal or state court that has jurisdiction over matters
arising in Fargo, North Dakota. THE BORROWER AND LENDER IRREVOCABLY WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR ANY INSTRUMENT OR
DOCUMENT DELIVERED THEREUNDER.
19.9. Successors and Assigns. This Credit Agreement shall be binding upon
and shall inure to the benefit of the parities hereto and their respective
successors and assigns, except that Borrower may not assign or transfer
its rights hereunder without the prior written consent of Lender.
19.10. Recitals Incorporated. The recitals to this Credit Agreement are
incorporated into and constitute an integral part of this Credit
Agreement.
19.11. Multiple Counterparts. This Credit Agreement may be executed in one
or more counterparts and by the different parties on separate
counterparts, each of which shall be deemed to be an original and all of
which shall constitute one and the same instrument.
19.12. Indemnity. In addition to the payment of expenses pursuant to
Section 19.3, the Borrower agreed to indemnify, defend and hold harmless
the Lender, and any of its participants, assignees, parent corporations,
subsidiary corporations, affiliated corporations and successor
corporations, and all present and future officers, directors, employees,
attorneys and agents of the foregoing (the "Indemnitees") from and against
any of the following (collectively, "Indemnified Liabilities"):
(a) any and all transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the
execution and delivery of the Loan Documents or the making of the
Advances or the Loans;
27
(b) any claims, loss or damage to which any Indemnitee may be subjected
if any representation or warranty contained in this Agreement proves
to be incorrect in any respect or as a result of any violation of
the covenant contained in this Agreement; and
(c) any and all other liabilities, losses, damages, penalties,
judgments, suits, claims, costs and expenses of any kind or nature
whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel) in connection with the foregoing and any
other investigative, administrative or judicial proceedings, whether
or not such Indemnitee shall be designated a party thereto, which
may be imposed on, incurred by or asserted against any such
Indemnitee, in any manner related to or arising out of or in
connection with the making of the Advances or the Loans and the Loan
Documents or the use or intended use of the proceeds of the Advances
or the Loans.
If any investigative, judicial or administrative proceeding arising from
any of the foregoing is brought against any Indemnitee, upon such
Indemnitee's request, the Borrower, or counsel designated by the Borrower
and satisfactory to the Indemnitee, will resist and defend such action,
suit or proceeding to the extent and in the manner directed by the
Indemnitee, at the Borrower's sole costs and expense. Each Indemnitee will
use its best efforts to cooperate in the defense of any such action, suit
or proceeding. If the foregoing undertaking to indemnify, defend and hold
harmless may be held to be unenforceable because it violates any law or
public policy, the Borrower shall nevertheless make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The Borrower's
obligation under this Section 19.12 shall survive the termination of this
Credit Agreement and the discharge of the Borrower's other obligations
hereunder.
19.13. Complete Agreement. This Credit Agreement, together with the Loan
Documents, comprises the complete and integrated agreement of the parties
on the subject matter hereof and supersedes all prior agreements, written
or oral, on the subject matter hereof
19.14. Assignments; Participants; Waiver of Claims. Lender may sell,
assign or grant a participation in the Subject Notes, in whole or in part
and may disclose information relating to the Borrower or otherwise
relevant to this Agreement, to such Persons and their financing sources
("Assignees"). No Assignee shall be deemed a partner or agent of the
Lender. The Borrower irrevocably agrees that any claims it may have or may
assert against the Lender for breach of contract (or related tort claims)
shall be personal to the Lender and shall not be asserted by way of direct
claim or offset against any Assignee or against any Loan sold or assigned
to any Assignee (and the Borrower hereby irrevocably waives any right it
otherwise may have, now or hereafter, to assert any such claim). The
Borrower acknowledges that the Assignees shall rely on the foregoing
waiver and agreement.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
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IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement
to be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
RDO EQUIPMENT CO.,
a Delaware Corporation
By: /s/Xxxx X. Xxxx
------------------------------
Its: President
------------------------------
By: /s/Xxxxx X. Xxxxx
------------------------------
Its: Secretary
------------------------------
AG CAPITAL COMPANY,
a Delaware Corporation
By: /s/Xxx Xxxxx
------------------------------
Its: President and General Manager
------------------------------
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