CREDIT AGREEMENT
DATED AS OF JUNE 15, 2001
BY AND BETWEEN
LACROSSE FOOTWEAR, INC.,
AS BORROWER
AND
FIRSTAR BANK, N.A.
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS..................................................1
1.1 Definitions......................................................1
1.2 Other Definitional Provisions...................................13
1.3 Accounting Terms and Determinations.............................14
ARTICLE 2 THE TERM LOAN...............................................14
2.1 Term Loan.......................................................14
ARTICLE 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES..............15
3.1 Default Rate....................................................15
3.2 Extension and Conversion........................................15
3.3 Prepayments.....................................................16
3.4 [Reserved]......................................................16
3.5 Capital Adequacy................................................16
3.6 Inability To Determine Interest Rate............................16
3.7 Illegality......................................................17
3.8 Requirements of Law.............................................17
3.9 Taxes...........................................................18
3.10 Indemnity.......................................................19
3.11 Place and Manner of Payments....................................19
ARTICLE 4 CONDITIONS..................................................20
4.1 Conditions to Closing Date......................................20
ARTICLE 5 REPRESENTATIONS AND WARRANTIES..............................21
5.1 Financial Statements............................................21
5.2 Ownership of Properties; Liens and Encumbrances.................21
5.3 Corporate Existence; Compliance with Law........................22
5.4 Corporate Power; Authorization; Enforceable Obligations.........22
5.5 No Legal Bar; No Default........................................22
5.6 No Material Litigation..........................................23
5.7 Investment Company Act..........................................23
5.8 Federal Regulations.............................................23
5.9 ERISA...........................................................23
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5.10 Environmental Matters...........................................23
5.11 Use of Proceeds.................................................24
5.12 Subsidiaries....................................................24
5.13 Taxes...........................................................24
5.14 Solvency........................................................25
5.15 Accuracy of Information.........................................25
ARTICLE 6 AFFIRMATIVE COVENANTS.......................................25
6.1 Financial Statements............................................25
6.2 Payment of Obligations..........................................26
6.3 Conduct of Business and Maintenance of Existence................26
6.4 Maintenance of Property; Insurance..............................26
6.5 Inspection of Property; Books and Records; Discussions..........27
6.6 Notices.........................................................27
6.7 Environmental Laws..............................................28
ARTICLE 7 NEGATIVE COVENANTS..........................................28
7.1 Indebtedness....................................................28
7.2 Liens...........................................................29
7.3 Nature of Business..............................................29
7.4 Consolidation, Merger or Sale of Assets, etc....................29
7.5 Advances, Investments and Loans.................................30
7.6 Guarantee Obligations...........................................30
7.7 Transactions with Affiliates....................................30
7.8 Ownership of Subsidiaries.......................................30
7.9 Fiscal Year.....................................................30
7.10 Prepayments of Indebtedness, etc................................31
7.11 Dividends.......................................................31
7.12 Financial Covenants.............................................31
ARTICLE 8 EVENTS OF DEFAULT...........................................32
ARTICLE 9 MISCELLANEOUS...............................................34
9.1 Amendments and Waivers..........................................34
9.2 Notices.........................................................35
9.3 No Waiver; Cumulative Remedies..................................36
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9.4 Survival of Representations and Warranties......................36
9.5 Payment of Expenses and Taxes...................................36
9.6 Successors and Assigns..........................................37
9.7 Set-off.........................................................37
9.8 Confidentiality.................................................37
9.9 Table of Contents and Section Headings..........................38
9.10 Counterparts....................................................38
9.11 Severability....................................................38
9.12 Integration.....................................................38
9.13 Governing Law...................................................38
9.14 Consent to Jurisdiction and Venue...............................38
9.15 Acknowledgments.................................................38
9.16 Waivers of Jury Trial...........................................39
9.17 Limitation of Liability.........................................39
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of June 15, 2001 (the "Credit Agreement"),
is by and between LACROSSE FOOTWEAR, INC., a Wisconsin corporation (the
"Borrower"), and FIRSTAR BANK, N.A., (the "Lender").
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Credit Agreement, the following terms
shall have the meanings specified below unless the context otherwise requires:
"Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person or (ii) directly or indirectly
owning or holding twenty percent (20%) or more of the equity interest in
such Person. For purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Assignment of Life Insurance" means the Assignment of Life Insurance
of even date herewith executed by the Borrower with respect to the
following life insurance policies owned by the Borrower: Northwestern
Mutual Life Insurance policies held on the lives of ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
(policy number 4,670,500), ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. (policy number 6,285,692),
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. (policy number 7,672,039); Amerus Life Insurance
Company policy held on the life of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (policy number
2,685,993); and Equitable Variable Life Insurance Company policies held on
the lives of ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. (policy numbers 38,215,413 and 38,215,411)
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (policy number AA40,249,839), and any other
assignment of life insurance executed by any Person, at any time or from
time to time, in favor of the Lender to secure the Obligations.
"Borrower" is defined in the Preamble.
"Borrowing Date" means in respect of the Term Loan, the date such Term
Loan is made.
"Business" is defined in Section 5.10(b).
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in Wisconsin are closed, except that, when used
in connection with a rate determination, borrowing or payment in respect of
a Eurodollar Loan, such day shall also be a day on which dealings between
banks are carried on in U.S. dollar deposits in London, England and Nassau,
Bahamas.
"Calculation Date" is defined in the definition of Interbank Offered
Rate.
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"Capital Expenditures" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness)
by such Person during any measuring period for any fixed assets or
improvements or for replacements, substitutions or additions thereto that
have a useful life of more than one year and that are required to be
capitalized under GAAP.
"Capital Lease" means any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a
balance sheet of the lessee in accordance with GAAP.
"Capital Lease Obligations" means the capital lease obligations
relating to a Capital Lease determined in accordance with GAAP.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Borrower and which is treated as a single employer under Section 414 of the
Code.
"Consolidated Subsidiaries" means Subsidiaries whose financial
statements are consolidated with those of the Borrower in accordance with
GAAP.
"Consolidated Tangible Assets" at any date of determination means the
total amount of all assets of the Borrower and its Subsidiaries as of the
end of the month immediately preceding the date on which such determination
is made, determined in accordance with GAAP, less all Intangible Assets.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Documents" means this Credit Agreement, the Assignment of Life
Insurance, the Note, the Shareholder Guaranty, the Subsidiary Guaranty, the
Mortgage, the Parent Security Agreement, the Subsidiary Security Agreement,
and all other related agreements and documents issued or delivered
hereunder or thereunder or pursuant hereto or thereto.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Shoe Manufacturing Co., a Wisconsin corporation
and a wholly-owned Subsidiary of the Borrower.
"Default" means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
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"Domestic Lending Office" means the office or branch of the Lender
identified in Section 9.2, or such other office or branch as the Lender may
identify by written notice to the Borrower.
"Environmental Laws" means any and all applicable foreign, federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority (or
other Requirement of Law including common law) regulating, relating to or
imposing liability or standards of conduct concerning protection of human
health or the environment, as now or may at any time be in effect during
the term of this Credit Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder.
"Eurodollar Lending Office" means the office or branch of the Lender
identified in Section 9.2, or such other office or branch as the Lender may
identify by written notice to the Borrower.
"Eurodollar Loan" means any portion of the Term Loan bearing interest
at a rate determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate determined pursuant to
the following formula:
Eurodollar Rate = Interbank Offered Rate
---------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System (or
any successor), as such regulation may be amended from time to time or any
successor regulation, as the maximum reserve requirement (including,
without limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to Eurocurrency liabilities as
that term is defined in Regulation D or against any other category of
liabilities that includes deposits by reference to which the interest rate
of Eurodollar Loans is determined, whether or not the Lender has any
Eurocurrency liabilities subject to such reserve requirement at that time.
Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities and
as such shall be deemed subject to reserve requirements without benefit of
credits for proration, exceptions or offsets that may be available from
time to time to the Lender. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" is defined in Section 8.
"Federal Funds Rate" means, for any day, the rate of interest per
annum (rounded upwards, if necessary, to the nearest whole multiple of
1/100 of 1%) equal to the
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weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that (A) if such day is not
a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day and (B) if no such
rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to the Lender on
such day on such transactions as determined by the Lender.
"GAAP" means generally accepted accounting principles in effect in the
United States of America applied on a consistent basis.
"GE Loan Agreement" means that certain Credit Agreement dated as of
June 13, 2001 among the Borrower, ▇▇▇▇▇▇, the other credit parties
signatory thereto, the lenders signatory thereto and General Electric
Capital Corporation, as agent, as the same may be modified or amended from
time to time.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee Obligation" means, as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of credit)
to induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum
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reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"Indebtedness" means, with respect of any Person: (a) indebtedness for
borrowed money; (b) indebtedness for the deferred purchase price of
property or services for which the Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise; (c) obligations which are
evidenced by notes, acceptances or other instruments; (d) Capital Lease
Obligations in respect of equipment; and (e) any unfunded obligation of the
Person to any Plan.
"Indemnified Liabilities" is defined in Section 9.5.
"Insolvency" means with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as
used in Section 4245 of ERISA.
"Insolvent" means pertaining to a condition of Insolvency.
"Intangible Assets" means any goodwill, patents, trademarks, trade
names, copyrights, operating rights, organizational or development
expenses, noncompetition agreements, investments in unconsolidated
Subsidiaries, loan placement fees, unamortized debt discount or expense,
unamortized deferred charges, and other assets properly classified as
intangible assets in accordance with GAAP.
"Interbank Offered Rate" means, with respect to any Eurodollar Loan
for the Interest Period applicable thereto, the per annum rate of interest
determined by the Lender (each such determination to be conclusive and
binding absent manifest error) to be the average (rounded up, if necessary,
to the nearest one-sixteenth (1/16) of one percent) of the offered rates
for deposits in U.S. dollars for the applicable Interest Period which
appear on the Reuters Screen LIBOR Page (or such other page on which the
appropriate information may be displayed), on the electronic communications
terminals in the Lender's money center as of 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period (the
"Calculation Date"), except as provided below. If fewer than two offered
rates appear for the applicable Interest Period or if the appropriate
screen is not accessible as of such time, the term "Interbank Offered Rate"
shall mean the per annum rate of interest determined by the Lender (each
such determination to be conclusive and binding absent manifest error) to
be the average (rounded up, if necessary, to the nearest one-sixteenth
(1/16) of one percent) as the effective rate at which deposits in
immediately available funds in Dollars are being, have been, or would be
offered or quoted by major banks to the Lender in the applicable interbank
market for Eurodollar deposits at 11:00 a.m. (Milwaukee, Wisconsin) on the
Business Day which is the second Business Day immediately preceding the
first day of such Interest Period, for a term comparable to such Interest
Period and in the amount of the requested Eurodollar Loan. If no such
offers or quotes are generally available for such amount, then the
provisions of Section 3.6 shall apply.
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"Intercreditor Agreement" means that certain Intercreditor Agreement
by and between the Lender and General Electric Capital Corporation, as
Agent, substantially in the form of Exhibit A attached hereto, as the same
may be modified or amended from time to time.
"Interest Payment Date" means (a) as to any Prime Rate Loan, the last
day of each month and the Term Termination Date, as applicable and (b) as
to any Eurodollar Loan, the last day of the applicable Interest Period.
Whenever any Interest Payment Date shall be stated to be due on a day which
is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day (subject to accrual of interest and Fees for the
period of such extension), except that in the case of Eurodollar Loans, if
the extension would cause the payment to be made in the next following
calendar month, then such payment shall instead be made on the next
preceding Business Day as provided in Section 3.11.
"Interest Period" means with respect to any Eurodollar Loan,
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two or three months thereafter, as selected by
the Borrower in the notice of borrowing or notice of conversion given
with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such Eurodollar
Loan and ending one, two or three months thereafter, as selected by
the Borrower by irrevocable notice to the Lender not less than three
Business Days prior to the last day of the then current Interest
Period with respect thereto;
provided that the foregoing provisions are subject to the following:
(A) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding Business
Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business
Day;
(B) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on
the last Business Day of the relevant calendar month;
(C) if the Borrower shall fail to give notice as provided
above, the Borrower shall be deemed to have selected a Prime Rate
Loan to replace the affected Eurodollar Loan;
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(D) with regard to the Term Loan, no Interest Period shall
extend beyond any principal amortization payment date unless the
portion of the Term Loan consisting of Prime Rate Loans together
with the portion of the Term Loan consisting of Eurodollar Loans
with Interest Periods expiring prior to or concurrently with the
date such principal amortization payment is due, is at least
equal to the amount of such principal amortization payment due on
such date; and
(E) no more than three (3) Eurodollar Loans may be in effect
at any time. For purposes hereof, Eurodollar Loans with different
Interest Periods shall be considered as separate Eurodollar
Loans, even if they shall begin on the same date and have the
same duration, although borrowings, extensions and conversions
may, in accordance with the provisions hereof, be combined at the
end of existing Interest Periods to constitute a new Eurodollar
Loan with a single Interest Period.
"Lender" is defined in the Preamble.
"Lien" means any mortgage, pledge, hypothecation, assignment, security
interest, encumbrance, lien (statutory or otherwise), priority or charge of
any kind including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any financing or
similar statement or notice filed under the Uniform Commercial Code as
adopted and in effect in the relevant jurisdiction (or other similar
recording or notice statute, and any lease in the nature thereof), except a
filing for precautionary purposes made with respect to a true lease or
other true bailment.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform its obligations, when such obligations are required to
be performed, under this Credit Agreement or any of the other Credit
Documents or (c) the validity or enforceability of this Credit Agreement,
the Note or any of the other Credit Documents or the rights or remedies of
the Lender hereunder or thereunder.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Mortgage" means collectively, those certain Real Estate Mortgages by
and between and the Borrower and the Lender substantially in the form of
Exhibit B attached hereto, as the same may be modified or amended from time
to time.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
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"Net Proceeds" means the gross cash proceeds including cash by way of
deferred payment pursuant to a promissory note, receivable or otherwise,
(but only as and when received) received from the sale, lease, conveyance,
disposition or other transfer of assets, or from a Recovery Event or from
the sale, issuance or placement of equity securities, Indebtedness for
borrowed money or Subordinated Debt to or from a Person other than the
Borrower, net of (i) transaction costs payable to third parties, (ii) the
estimated taxes payable with respect to such proceeds (including, without
duplication, withholding taxes), (iii) Indebtedness (other than
Indebtedness owed to the Lender pursuant to the Credit Documents) which is
secured by the assets which are the subject of such event to the extent
such Indebtedness is paid with a portion of the proceeds therefrom, and
(iv) any and all cash costs which may occur as a result of discontinuing
operations, shut-downs or otherwise resulting from, the disposition of such
assets.
"Net Worth" means, with respect to any Person as of any date of
determination, the book value of the assets of such Person, minus the sum
of (a) reserves applicable thereto, and (b) all of such Person's
liabilities on a consolidated basis (including accrued and deferred income
taxes), all as determined in accordance with GAAP.
"Non-Excluded Taxes" is defined in Section 3.9.
"Note" means the Term Note.
"Notice of Extension/Conversion" means the written notice of extension
or conversion as referenced and defined in Section 3.2.
"Obligations" means, without duplication, all of the obligations of
the Borrower to the Lender (including the obligations to pay principal of
and interest on the Term Loan, and to pay certain expenses and the
obligations arising in connection with various indemnities) whenever
arising, under this Credit Agreement, the Note or any other of the Credit
Documents to which the Borrower is a party.
"Parent Security Agreement" means that certain Security Agreement by
and between the Borrower and the Lender substantially in the form of
Exhibit C attached hereto, as the same may be modified or amended from time
to time.
"PBGC" means the Pension Benefit Guaranty Corporation established
under ERISA, and any successor thereto.
"Permitted Guarantee Obligations" means (i) Guarantee Obligations of
the Borrower and its Subsidiaries relating to Indebtedness of the Borrower
or a Subsidiary otherwise permitted under Section 7.1, (ii) Guarantee
Obligations of the Borrower and its Subsidiaries relating to obligations of
their customers under third-party wholesale/retail finance arrangements,
consistent with past practices of the Borrower, and (iii) Guarantee
Obligations of the Borrower and its Subsidiaries relating to performance
bonds issued for their customers to facilitate sales of products of the
Borrower and its Subsidiaries, consistent with past practices of the
Borrower; provided, however, that in no event shall the aggregate amount of
all Permitted Guarantee Obligations exceed $500,000 at any one time
outstanding.
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"Permitted Investments" means (i) cash; (ii) accounts, chattel paper,
and notes receivable created by the Borrower in the ordinary course of
business; (iii) advances in the ordinary course of business to suppliers,
employees and officers of the Borrower consistent with past practices in an
aggregate amount at any time outstanding of not more than $200,000 to any
one individual or $400,000 in the aggregate; (iv) investments in bank
certificates of deposit (but only with banks having a recognized ▇▇▇▇▇▇▇▇'▇
BankWatch rating of BC or better), open market commercial paper maturing
within one year having the highest rating of either Standard & Poors
Corporation or ▇▇▇▇▇'▇ Investors Services, Inc., U.S. Treasury Bills
subject to repurchase agreements and short-term obligations issued or
guaranteed by the U.S. Government or any agency thereof, and non-rated
commercial paper issued by or through the Lender; (v) investments in
open-end diversified investment companies of recognized financial standing
investing solely in short-term money market instruments consisting of
securities issued or guaranteed by the United States government, its
agencies or instrumentalities, or municipalities, time deposits and
certificates of deposit issued by domestic banks or London branches of
domestic banks, bankers acceptances, repurchase agreements, high grade
commercial paper and the like; (vi) Eurodollar certificates of deposit in a
financial institution of recognized standing with a rating by ▇▇▇▇▇▇▇▇'▇
BankWatch of BC or better; (vii) stock or other securities of a Subsidiary
or other entity which is, or immediately after such investment will be, a
Subsidiary (subject to the terms of Section 7.8 hereof); (viii) loans or
advances to Subsidiaries constituting general obligations of such
Subsidiaries, provided such obligations shall not be subordinated to any
other obligations of such Subsidiaries; and (ix) purchases of or
investments in bonds or other obligations issued by a municipality; and (x)
investments that would not otherwise cause the Borrower to violate Section
7.12 hereof. As used herein, "investment" means all investments, in cash or
by delivery of property made, directly or indirectly in, to or from any
Person, whether by acquisition of shares of capital stock, property,
assets, indebtedness or other obligations or securities or by loan advance,
capital contribution or otherwise.
"Permitted Liens" means
(i) Liens created by or otherwise existing under or in connection
with this Credit Agreement or the other Credit Documents in favor of
the Lender (including Liens in favor of the Lender on cash collateral
deposits supporting letters of credit outstanding on the Closing
Date), and Liens created by or otherwise existing under or in
connection with the GE Loan Agreement in favor of General Electric
Capital Corporation, as Agent, provided that all such Liens are
subject to the terms of the Intercreditor Agreement;
(ii) purchase money Liens securing purchase money indebtedness
(and refinancings thereof) and Capital Lease Obligations, to the
extent permitted under Section 7.1(c);
(iii) Liens for taxes, assessments, charges or other governmental
levies not yet due or as to which the period of grace, if any, related
thereto has not expired or which are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books
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of the Borrower or its Subsidiaries, as the case may be, in conformity
with GAAP (or, in the case of Subsidiaries with significant operations
outside of the United States of America, generally accepted accounting
principles in effect from time to time in their respective
jurisdictions of incorporation);
(iv) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(v) pledges or deposits in connection with workers compensation,
unemployment insurance and other social security legislation and
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements;
(vi) deposits to secure the performance of bids, trade contracts,
(other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(vii) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any
Lien referred to in the foregoing clauses; provided that such
extension, renewal or replacement Lien shall be limited to all or a
part of the property which secured the Lien so extended, renewed or
replaced (plus improvements on such property);
(viii) easements, rights of way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not material in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any Subsidiary;
(ix) Liens in existence on the date hereof listed on Schedule
7.2, securing Indebtedness permitted by Sections 7.1(b) and 7.1(c),
provided that no such Lien is spread to cover any additional property
(other than proceeds of the collateral originally subject to such Lien
in accordance with the instrument creating such Lien) after the
Closing Date and that the amount of Indebtedness secured thereby is
not increased, and Liens that may come into existence after the date
hereof in favor of the ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Trust on the
Borrower's assets, provided that such Liens are subordinated on terms
acceptable to the Lender;
(x) leases and subleases otherwise permitted hereunder granted to
others not interfering in any material respect in the business of the
Borrower or any Subsidiary; and
(xi) attachment or judgment Liens, where the attachment or
judgment which gave rise to such Liens does not constitute an Event of
Default hereunder.
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"Permitted Sale-Leaseback Transaction" means a transaction pursuant to
which the Borrower sells an item of equipment to a financial institution
and concurrently with such sale (i) leases such item of equipment back from
such financial institution and (ii) subleases such item of equipment to a
customer of the Borrower pursuant to a sublease agreement under which such
customer obtains an option to purchase such item of equipment at or before
the end of such sublease.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"Plan" means at any particular time, any employee benefit plan which
is covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Prime Rate" means, for any day, the higher of (i) the per annum rate
of interest established from time to time by the Lender at its principal
office in Milwaukee, Wisconsin as its Prime Rate, or (ii) the Federal Funds
Rate plus 1%. Any change in the interest rate resulting from a change in
the Prime Rate shall become effective as of 12:01 a.m. of the Business Day
on which each change in the Prime Rate is announced by the Lender. The
Prime Rate is a reference rate used by the Lender in determining interest
rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit to any debtor.
"Prime Rate Loan" means any portion of the Term Loan bearing interest
at a rate determined by reference to the Prime Rate.
"Properties" is defined in subsection 5.10(a).
"Recovery Event" means the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation award payable
by reason of theft, loss, physical destruction or damage, taking or similar
event with respect to any of their respective property or assets.
"Reorganization" means with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.
"Reportable Event" means any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty-day notice
period is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC
Reg. ss.2615.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or to which any of its material
property is subject.
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"Shareholder Guaranty" means that certain guaranty from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ in favor of the Lender substantially in the form of Exhibit D
attached hereto, as the same may be modified or amended from time to time.
"Single Employer Plan" means any Plan which is not a Multi-Employer
Plan.
"Solvent" means, with respect to any Person as of a particular date,
that on such date (i) such Person is able to realize upon its assets and
pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (ii) such
Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond its ability to pay as such debts and liabilities
mature in their ordinary course, (iii) such Person is not engaged in a
business or a transaction, and is not about to engage in a business or a
transaction, for which such Person's property would constitute unreasonably
small capital after giving due consideration to the prevailing practice in
the industry in which such Person is engaged or is to engage, (vi) the fair
value of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person and (v) the present fair saleable value of the assets of such Person
is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured.
In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in
light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.
"Specified Sales" means (i) the sale, transfer, lease or other
disposition of inventory and materials in the ordinary course of business,
(ii) the sale, transfer, lease or other disposition of machinery, parts and
equipment that are no longer useful in the conduct of the business of the
Borrower or any of its Subsidiaries, as appropriate, (iii) the sale,
transfer, lease or other disposition of other machinery, parts, equipment
and real estate for cash, provided, however, that at least 80% of the Net
Proceeds thereof shall be paid to the Lender as a prepayment of the Term
Loan under Section 3.3(a) (including without limitation at least 80% of the
Net Proceeds of any sale of machinery, parts, equipment and real estate
comprising any part of Borrower's La Crosse, Wisconsin manufacturing
facility) and the balance of such Net Proceeds shall, to the extent not
applied to the Term Loan, be applied to the obligations under the GE Loan
Agreement; and (iv) in addition to the transactions described in
subsections (i), (ii) and (iii), any other sale, transfer, lease or other
disposition of assets where the proceeds of such disposition do not exceed
$1,500,000 during any fiscal year or $4,000,000 during the term of this
Credit Agreement.
"Subordinated Debt" is defined in Section 7.10.
"Subsidiary" means, as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
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management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Credit Agreement shall refer to a Subsidiary or Subsidiaries of the
Borrower.
"Subsidiary Guaranty" means that certain guaranty from ▇▇▇▇▇▇ in favor
of the Lender substantially in the form of Exhibit E attached hereto, as
the same may be modified or amended from time to time.
"Subsidiary Security Agreement" means that certain Security Agreement
by and between ▇▇▇▇▇▇ and the Lender substantially in the form of Exhibit F
attached hereto, as the same may be modified or amended from time to time.
"Tangible Net Worth" means, with respect to any Person at any date,
the Net Worth of such Person at such date, excluding, however, from the
determination of the total assets at such date, (a) all goodwill,
capitalized organizational expenses, capitalized research and development
expenses, trademarks, trade names, copyrights, patents, patent
applications, licenses and rights in any thereof, and other intangible
items, (b) all unamortized debt discount and expense, (c) treasury stock,
(d) any write-up in the book value of any asset resulting from a
revaluation thereof, (e) software and (f) all deferred tax benefits.
"Term Loan" is defined in Section 2.1(a).
"Term Note" means the promissory note of the Borrower in favor of the
Lender evidencing the Term Loan provided pursuant to Section 2.1(d), as
such promissory note may be amended, modified, supplemented, extended,
renewed or replaced from time to time.
"Term Termination Date" means May 28, 2004 or the earlier termination
in full of the Term Loan.
"Type" means, as to the Term Loan, its nature as a Prime Rate Loan or
a Eurodollar Loan, as the case may be.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all capitalized definitional
terms defined in this Credit Agreement shall have the defined meanings when
used in the Note or other Credit Documents or any certificate or other
document made or delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Credit Agreement shall refer to this Credit
Agreement as a whole and not to any particular provision of this Credit
Agreement, and Section, subsection, Schedule and Exhibit references are to
this Credit Agreement unless otherwise specified.
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(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(d) For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean
"to but excluding".
1.3 Accounting Terms and Determinations. Unless otherwise specified herein,
all terms of an accounting character used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with GAAP,
applied on a basis consistent (except for changes concurred in by the Borrower's
independent public accountants or otherwise required by a change in GAAP) with
the most recent audited consolidated financial statements of the Borrower and
its Consolidated Subsidiaries delivered to the Lender.
ARTICLE 2
THE tERM lOAN
2.1 Term Loan.
(a) Term Loan. Subject to and upon the terms and conditions hereof,
the Lender hereby agrees to make a term loan (the "Term Loan") to the
Borrower on the Closing Date in the aggregate principal amount of SEVEN
MILLION FIVE HUNDRED THOUSAND DOLLARS ($7,500,000) for the purposes
hereinafter set forth. The Term Loan may consist of Prime Rate Loans or
Eurodollar Loans, or a combination thereof, as the Borrower may request.
Amounts repaid on the Term Loan may not be reborrowed. Eurodollar Loans
shall be made by the Lender at its Eurodollar Lending Office and Prime Rate
Loans at its Domestic Lending Office. In the event the Borrower shall fail
to borrow the entire Term Loan, the scheduled amortization payments
required under Section 2.1(b) shall be reduced in inverse order of maturity
by the amount of the difference.
(b) Repayment of Term Loan. The principal amount of the Term Loan
shall be repaid in semi-annual payments of $750,000 each, commencing on
November 15, 2001 and on the fifteenth day of each May and November
thereafter, with a final principal payment of the outstanding unpaid
balance of the Term Loan (together with all accrued but unpaid interest) on
the Term Termination Date.
(c) Interest on the Term Loan. Subject to the provisions of Section
3.1, the Term Loan shall bear interest as follows:
(i) Prime Rate Loans. During such periods as the Term Loan shall
be comprised of Prime Rate Loans, each such Prime Rate Loan shall bear
interest at a per annum rate equal to the Prime Rate; and
(ii) Eurodollar Loans. During such periods as the Term Loan shall
be comprised of Eurodollar Loans, each such Eurodollar Loan shall bear
interest at a
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per annum rate equal to the sum of the applicable Eurodollar Rate plus
200 basis points as of the commencement of the Interest Period
applicable thereto.
Interest on the Term Loan shall be payable in arrears on each Interest Payment
Date.
(d) Term Note. The Term Loan shall be evidenced by a duly executed
promissory note of the Borrower to each Lender in the original principal
amount of the Term Loan substantially in the form of Exhibit E.
ARTICLE 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate. Upon the occurrence, and during the continuance, of an
Event of Default, the principal of and, to the extent permitted by law, interest
on the Term Loan and any other amounts owing hereunder or under the other Credit
Documents shall bear interest, payable on demand, at a per annum rate which is
equal to the rate which would otherwise be applicable (or if no rate is
applicable, whether in respect of interest, fees or other amounts, then the
Prime Rate) plus 2%.
3.2 Extension and Conversion. The Borrower shall have the option, on any
Business Day, to extend the Term Loan into a subsequent permissible Interest
Period or to convert the Term Loan into a Term Loan of another Type; provided,
however, that (i) except as provided in Section 3.7, Eurodollar Loans may be
converted into Prime Rate Loans only on the last day of the Interest Period
applicable thereto, (ii) Eurodollar Loans may be extended, and Prime Rate Loans
may be converted into Eurodollar Loans, only if no Default or Event of Default
is in existence on the date of extension or conversion, (iii) the portion of the
Term Loan extended as, or converted into, Eurodollar Loans shall be subject to
the terms of the definition of "Interest Period" set forth in Section 1.1 and
(iv) any request for extension or conversion of a Eurodollar Loan which shall
fail to specify an Interest Period shall be deemed to be a request for an
Interest Period of one month. Each such extension or conversion shall be
effected by the Borrower by giving a Notice of Extension/Conversion in the form
of Exhibit 3.2 (or telephone notice promptly confirmed in writing) to the Lender
prior to 12:00 noon (Milwaukee, Wisconsin time) on the Business Day of, in the
case of the conversion of a Eurodollar Loan into a Prime Rate Loan and on the
third Business Day prior to, in the case of the extension of a Eurodollar Loan
as, or conversion of a Prime Rate Loan into, a Eurodollar Loan, the date of the
proposed extension or conversion, specifying the date of the proposed extension
or conversion, the portion of the Term Loan to be so extended or converted, the
Types of Term Loan into which such portion of the Term Loan are to be converted
and, if appropriate, the applicable Interest Periods with respect thereto. Each
request for extension or conversion shall constitute a representation and
warranty by the Borrower of the matters specified in Section 4.2. In the event
the Borrower fails to request extension or conversion of any Eurodollar Loan in
accordance with this Section, or any such conversion or extension is not
permitted or required by this Section, then such portion of the Term Loan shall
be automatically converted into Prime Rate Loans at the end of their Interest
Period.
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3.3 Prepayments.
(a) Voluntary Prepayments. The Term Loan may be prepaid in whole or in
part without premium or penalty except as provided in Section 3.10. Any
partial prepayment shall be in a minimum aggregate principal amount of
$100,000 and integral multiples of $100,000 in excess thereof or such
smaller amount as may be necessary to prepay the Term Loan in full. Amounts
prepaid on the Term Loan shall be applied first, to the next two (2)
scheduled payments of the principal of the Term Loan and the balance, if
any, shall be applied in inverse order of maturity to the payments of
principal due pursuant to Section 2.1(b). Amounts prepaid on the Term Loan
may not be reborrowed.
(b) Notice. Except as otherwise provided herein, the Borrower will
provide notice to the Lender of any prepayment of the Term Loan by 10:30
A.M. (Milwaukee, Wisconsin time) on the day prior to the date of
prepayment.
3.4 [Reserved]
3.5 Capital Adequacy. If the Lender has reasonably determined that the
adoption or effectiveness of any applicable law, rule or regulation regarding
capital adequacy made after the date hereof, or any change therein made after
the date hereof, or any change in the interpretation or administration thereof
by any Governmental Authority, central bank or comparable agency charged with
the interpretation or administration thereof made after the date hereof, or
compliance by the Lender or its parent company with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency made after the date hereof, has or
would have the effect of reducing the rate of return on the Lender's or its
parent company's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which the Lender could have achieved
but for such adoption, effectiveness, change or compliance (taking into
consideration the policies of the Lender and its parent company with respect to
capital adequacy), then, within 10 Business Days after the Borrower's receipt of
the certificate referred to in the next sentence, the Borrower shall pay to the
Lender such additional amount or amounts as will compensate the Lender and its
parent company for such reduction. A certificate as to the amount of such
reduction in rate of return, the good faith basis therefor and setting forth in
reasonable detail the calculations used by the Lender to arrive at the amount or
amounts claimed to be due, shall be submitted to the Borrower. Each
determination by the Lender of amounts owing under this Section shall be
rebuttably presumptive evidence of the matters set forth therein. No demand for
payment under this Section shall be made unless the Lender shall make comparable
demands of other similarly situated borrowers. The provisions of this Section
shall survive termination of this Credit Agreement and the payment of the Term
Loan and all other amounts payable hereunder.
3.6 Inability To Determine Interest Rate. If prior to the first day of any
Interest Period, the Lender shall have reasonably determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, the
Lender shall give telecopy or telephonic notice thereof to the Borrower as soon
as
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practicable thereafter. If such notice is given (a) any Eurodollar Loans
requested to be made on the first day of such Interest Period shall be made as
Prime Rate Loans, (b) any portion of the Term Loan that was to have been
converted on the first day of such Interest Period to or continued as Eurodollar
Loans shall be converted to or continued as Prime Rate Loans and (c) any
outstanding Eurodollar Loans shall be converted, at the end of their respective
Interest Periods to Prime Rate Loans. Until such notice has been withdrawn by
the Lender, no further Eurodollar Loans shall be made or continued as such, nor
shall the Borrower have the right to convert Prime Rate Loans to Eurodollar
Loans.
3.7 Illegality. Notwithstanding any other provision herein, if the adoption
of or any change in any Requirement of Law or in the interpretation or
application thereof occurring after the Closing Date shall make it unlawful for
the Lender to make or maintain Eurodollar Loans as contemplated by this Credit
Agreement, (a) the Lender shall promptly give written notice of such
circumstances to the Borrower (which notice shall be withdrawn whenever such
circumstances no longer exist), (b) the commitment of the Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert a Prime
Rate Loan to Eurodollar Loans shall forthwith be canceled and, until such time
as it shall no longer be unlawful for the Lender to make or maintain Eurodollar
Loans, the Lender shall then have a commitment only to make a Prime Rate Loan
when a Eurodollar Loan is requested and (c) the portion of the Term Loan then
outstanding as Eurodollar Loans, if any, shall be converted automatically to
Prime Rate Loans on the respective last days of the then current Interest
Periods with respect to such Loans or within such earlier period as required by
law. If any such conversion of a Eurodollar Loan occurs on a day which is not
the last day of the then current Interest Period with respect thereto, the
Borrower shall pay to the Lender such amounts, if any, as may be required
pursuant to Section 3.10.
3.8 Requirements of Law. If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof applicable to
the Lender, or compliance by the Lender with any request or directive (whether
or not having the force of law) from any central bank or other Governmental
Authority, in each case made subsequent to the Closing Date:
(i) shall subject the Lender to any tax of any kind whatsoever on
or in respect of any Eurodollar Loans made by it or its obligation to
make Eurodollar Loans, or change the basis of taxation of payments to
the Lender in respect thereof except for Non-Excluded Taxes covered by
Section 3.9 and changes in taxes measured by or imposed upon the
overall net income, or franchise tax (imposed in lieu of such net
income tax), of the Lender or its applicable lending office, branch,
or any affiliate thereof); or
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar condition or requirement against
assets held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of the Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder;
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and the result of any of the foregoing is to increase the cost to the Lender, by
an amount which the Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, upon notice to the
Borrower from the Lender, in accordance herewith, the Borrower shall promptly
pay the Lender, upon its demand, any additional amounts necessary to compensate
the Lender for such increased cost or reduced amount receivable, provided that,
in any such case, the Borrower may elect to convert the Eurodollar Loans made by
the Lender hereunder to Prime Rate Loans by giving the Lender at least one
Business Day's notice of such election, in which case the Borrower shall
promptly pay to the Lender, upon demand, without duplication, such amounts, if
any, as may be required pursuant to Section 3.10. If the Lender becomes entitled
to claim any additional amounts pursuant to this subsection, it shall provide
prompt notice thereof to the Borrower, certifying (a) that one of the events
described in this Section 3.8 has occurred and describing in reasonable detail
the nature of such event, (b) as to the increased cost or reduced amount
resulting from such event and (c) as to the additional amount demanded by the
Lender and a reasonably detailed explanation of the calculation thereof. Such a
certificate as to any additional amounts payable pursuant to this subsection
shall be submitted by the Lender to the Borrower and shall be conclusive in the
absence of manifest error. No demand for payment under this Section shall be
made unless the Lender shall make comparable demands of other similarly situated
borrowers. This covenant shall survive the termination of this Credit Agreement
and the payment of the Term Loan and all other amounts payable hereunder.
3.9 Taxes. Except as provided below in this Section, all payments made by
the Borrower under this Credit Agreement and the Note shall be made free and
clear of, and without deduction or withholding for or on account of, any present
or future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding taxes measured by
or imposed upon the overall net income of the Lender or its applicable lending
office, or any branch or affiliate thereof, and all franchise taxes, branch
taxes, taxes on doing business or taxes on the overall capital or net worth of
the Lender or its applicable lending office, or any branch or affiliate thereof,
in each case imposed in lieu of net income taxes, imposed: (i) by the
jurisdiction under the laws of which the Lender, applicable lending office,
branch or affiliate is organized or is located, or in which its principal
executive office is located, or any nation within which such jurisdiction is
located or any political subdivision thereof; or (ii) by reason of any
connection between the jurisdiction imposing such tax and the Lender, applicable
lending office, branch or affiliate other than a connection arising solely from
the Lender having executed, delivered or performed its obligations, or received
payment under or enforced, this Credit Agreement or the Note. If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Lender hereunder or under the Note, (A) the amounts so payable to
the Lender shall be increased to the extent necessary to yield to the Lender
(after payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Credit
Agreement and the Note and (B) as promptly as possible thereafter the Borrower
shall send to the Lender a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Lender the required receipts or other required documentary
evidence, the Borrower shall indemnify the
- 18 -
Lender for any incremental taxes, interest or penalties that may become payable
by the Lender as a result of any such failure. The agreements in this Section
shall survive the termination of this Credit Agreement and the payment of the
Term Loan and all other amounts payable hereunder.
3.10 Indemnity. The Borrower agrees to indemnify the Lender and to hold the
Lender harmless from any loss or expense which the Lender may sustain or incur
(other than through the Lender's gross negligence or willful misconduct) as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower has given a notice thereof in accordance with the provisions of
this Credit Agreement or (c) the making of a prepayment of Eurodollar Loans on a
day which is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, convert
or continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein over (ii) the amount of interest (as reasonably
determined by the Lender) which would have accrued to the Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank Eurodollar market, provided, however, that the amount of such lost
interest, if any, shall be discounted to a present value as of the date of the
indemnification payment, using as the applicable discount rate(s) the rate(s) of
per annum interest used by the Lender in making the computations pursuant to the
foregoing clause (ii). This covenant shall survive the termination of this
Credit Agreement and the payment of the Term Loan and all other amounts payable
hereunder.
3.11 Place and Manner of Payments. Except as otherwise specifically
provided herein, all payments hereunder shall be made to the Lender in Dollars
in immediately available funds, without offset, deduction, counterclaim or
withholding of any kind, at its offices specified in Section 9.2 not later than
12:00 noon (Milwaukee, Wisconsin time) on the date when due. Payments received
after such time shall be deemed to have been received on the next succeeding
Business Day. The Lender may, at the Borrower's request, debit the amount of any
such payment which is not made by such time to Account No. 112560280 maintained
by the Borrower with the Lender. Whenever any payment hereunder shall be stated
to be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day (subject to accrual of interest and
Fees for the period of such extension), except that in the case of Eurodollar
Loans, if the extension would cause the payment to be made in the next following
calendar month, then such payment shall instead be made on the next preceding
Business Day. Except as expressly provided otherwise herein, all computations of
interest and fees shall be made on the basis of actual number of days elapsed
over a year of 360 days. Interest shall accrue from and include the date of
borrowing, but exclude the date of payment.
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ARTICLE 4
CONDITIONS
4.1 Conditions to Closing Date. This Credit Agreement shall become
effective upon the satisfaction of the following conditions precedent:
(a) Execution of Credit Documents. The Lender shall have received:
this Credit Agreement, the Assignment of Life Insurance, the Note, the
Shareholder Guaranty, the Subsidiary Guaranty, the Mortgage, the Parent
Security Agreement and the Subsidiary Security Agreement, together with
appropriate Uniform Commercial Code financing statements, in each case,
conforming to the requirements of this Credit Agreement and executed by a
duly authorized officer of the Borrower (or, in the case of the Shareholder
Guaranty, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and in the case of the Subsidiary Guaranty
and the Subsidiary Security Agreement and related financing statements, by
a duly authorized officer of ▇▇▇▇▇▇).
(b) GE Loan Matters. Copies of: (i) the GE Loan Agreement executed by
the Borrower and General Electric Capital Corporation, in form and
substance reasonably satisfactory to the Lender, and evidence satisfactory
to the Lender that all conditions to the effectiveness of such Loan
Agreement have been satisfied; and (ii) the Intercreditor Agreement,
executed by the Lender and GE Capital Corporation and acknowledged by the
Borrower.
(c) Liability and Casualty Insurance. Copies of insurance policies or
certificates of insurance evidencing liability and casualty insurance
meeting the requirements set forth herein.
(d) Financial Information. Copies of audited consolidated financial
statements for the Borrower and its Subsidiaries for fiscal year 2000; and
preliminary interim quarterly company-prepared consolidated financial
statements for the Borrower and its Subsidiaries.
(e) Corporate Documents. Receipt by the Lender of the following:
(i) Articles of Incorporation. Copies of the articles of
incorporation of the Borrower and ▇▇▇▇▇▇ certified to be true and
complete as of a recent date by the appropriate governmental authority
of the state of their respective incorporation.
(ii) Resolutions. Copies of resolutions of the Board of Directors
of each of the Borrower and ▇▇▇▇▇▇ approving and adopting the Credit
Documents to which they are a party, the transactions contemplated
therein and authorizing execution and delivery thereof, certified by a
secretary or assistant secretary as of the Closing Date to be true and
correct and in force and effect as of such date.
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(iii) Bylaws. A copy of the bylaws of the Borrower and ▇▇▇▇▇▇
certified by a secretary or assistant secretary as of the Closing Date
to be true and correct and in force and effect as of such date.
(iv) Good Standing. Copies of certificates of good standing,
existence or its equivalent with respect to the Borrower and ▇▇▇▇▇▇
certified as of a recent date by the appropriate Governmental
Authorities of the state of incorporation of each and each other state
in which the failure to so qualify and be in good standing would have
a Material Adverse Effect.
(f) Officer's Certificate. The Lender shall have received certificates
of a duly authorized officer of the Borrower and ▇▇▇▇▇▇ dated the Closing
Date, substantially in the form of Exhibit 4.1(f) with appropriate
insertions and attachments.
(g) Legal Opinion of Counsel. The Lender shall have received an
opinion of ▇▇▇▇▇ & Lardner, counsel for the Borrower, ▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, dated the Closing Date and addressed to the Lender, in form and
substance satisfactory to the Lender.
(h) Additional Matters. All other documents and legal matters in
connection with the transactions contemplated by this Credit Agreement
shall be reasonably satisfactory in form and substance to the Lender .
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Credit Agreement and to make the
Term Loan herein provided for, the Borrower hereby represents and warrants to
the Lender that:
5.1 Financial Statements. The Borrower has furnished to the Lender (a) the
audited consolidated financial statements of the Borrower and its Consolidated
Subsidiaries as of December 31, 2000, together with an unqualified opinion
thereon by McGladry & ▇▇▇▇▇▇ and (b) the preliminary unaudited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries as of
March 31, 2001, prepared by the Borrower. Such financial statements were
prepared in accordance with GAAP consistently applied throughout the periods
involved, are correct and complete and fairly present the consolidated financial
condition of the Borrower and such Subsidiaries as of such dates and the results
of their operations for the periods ended on such dates, subject, in the case of
the preliminary unaudited interim statements, to the absence of footnotes, audit
and normal year-end adjustments. Other than as set forth on Schedule 5.1, since
March 31, 2001, there has been no development or event which has had a Material
Adverse Effect.
5.2 Ownership of Properties; Liens and Encumbrances. Other than as set
forth on Schedule 5.2, each of the Borrower and its Subsidiaries has good and
marketable title to all property, real and personal, reflected on the most
recent financial statement of the Borrower furnished to the Lender, and all
property purported to have been acquired since the date of such financial
statement, except property sold or otherwise disposed of in the ordinary course
of
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business subsequent to such date; and all such property is free of any Lien
except Permitted Liens. All owned and leased buildings and equipment of the
Borrower used in the Borrower's business are in good operating condition, repair
and working order and conform to all applicable laws, ordinances and regulations
the violation of which would have a Material Adverse Effect. The Borrower
possesses adequate trademarks, trade names, copyrights, patents, service marks
and licenses, or rights thereto, for the present and planned future conduct of
its business substantially as now conducted, without any known conflict with the
rights of others which would result in a Material Adverse Effect.
5.3 Corporate Existence; Compliance with Law. Each of the Borrower and its
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing (or similar concept under applicable law, including, without
limitation, the concept of active status under the laws of the State of
Wisconsin) under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority and the legal right to own and operate all its
material property, to lease the material property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification except to the extent that the failure to so
qualify or be in good standing would not, in the aggregate, have a Material
Adverse Effect and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
5.4 Corporate Power; Authorization; Enforceable Obligations. Each of the
Borrower and ▇▇▇▇▇▇ has full corporate power and authority and the legal right
to make, deliver and perform the Credit Documents to which it is party and has
taken all necessary corporate action to authorize the execution, delivery and
performance by it of the Credit Documents to which it is party. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or with the execution, delivery or performance of any
Credit Document to which it is a party by the Borrower or ▇▇▇▇▇▇ or with the
validity or enforceability of any Credit Document to which it is a party against
the Borrower or ▇▇▇▇▇▇, other than for certain filings necessary to perfect the
Lender's Liens under the Mortgage, the Parent Security Agreement and the
Subsidiary Security Agreement. Each Credit Document to which it is a party has
been duly executed and delivered on behalf of the Borrower and ▇▇▇▇▇▇. Each
Credit Document to which it is a party constitutes a legal, valid and binding
obligation of the Borrower and ▇▇▇▇▇▇, enforceable against the Borrower and
▇▇▇▇▇▇, in accordance with its respective terms.
5.5 No Legal Bar; No Default. The execution, delivery and performance of
the Credit Documents, the borrowings thereunder and the use of the proceeds of
the Term Loan will not violate any Requirement of Law or any Contractual
Obligation of the Borrower or its Subsidiaries the violation of which would
reasonably be expected to have a Material Adverse Effect (except those as to
which waivers or consents have been obtained), and will not result in, or
require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any Requirement of Law or
Contractual Obligation. Neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect which would reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
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5.6 No Material Litigation. Except as set forth in Schedule 5.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the best knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of its or their respective properties or revenues (a) with respect to the Credit
Documents or any Loan or any of the transactions contemplated hereby, or (b)
which, if adversely determined, would reasonably be expected to have a Material
Adverse Effect.
5.7 Investment Company Act. The Borrower is not an "investment company" or
a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
5.8 Federal Regulations. No part of the proceeds of the Term Loan hereunder
will be used directly or indirectly for any purpose which violates, or which
would be inconsistent with, the provisions of Regulation T, U or X of the Board
of Governors of the Federal Reserve System as now and from time to time
hereafter in effect. The Borrower and its Subsidiaries taken as a group do not
own "margin stock" except (a) margin stock which is a Permitted Investment, and
(b) capital stock of the Borrower held by the Borrower as treasury stock, but
only to the extent otherwise permitted by this Credit Agreement.
5.9 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" within the meaning of Section 412 of the Code (or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code, except to the extent that any such occurrence or failure to comply
would not reasonably be expected to have a Material Adverse Effect. No
termination of a Single Employer Plan has occurred resulting in any liability
that has remained underfunded, and no Lien in favor of the PBGC or a Plan has
arisen, during such five-year period which would reasonably be expected to have
a Material Adverse Effect. The present value of all accrued benefits under each
Single Employer Plan (based on those assumptions used to fund such Plans) did
not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits by an amount which, as determined in
accordance with GAAP, would reasonably be expected to have a Material Adverse
Effect. Neither the Borrower nor any Commonly Controlled Entity is currently
subject to any liability for a complete or partial withdrawal from a
Multiemployer Plan which would reasonably be expected to have a Material Adverse
Effect.
5.10 Environmental Matters. Except as set forth on Schedule 5.10 and except
to the extent that all of the following, in the aggregate, would not reasonably
be expected to have a Material Adverse Effect:
(a) The facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "Properties") do not contain any
Materials of Environmental Concern in amounts or concentrations which (i)
constitute a violation of, or (ii) could give rise to liability under, any
Environmental Law.
(b) The Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, in all
material respects with all applicable
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Environmental Laws, and there is no contamination at, under or about the
Properties or violation of any Environmental Law with respect to the
Properties or the business operated by the Borrower or any of its
Subsidiaries (the "Business").
(c) Neither the Borrower nor any of its Subsidiaries has received any
notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business,
nor does the Borrower have knowledge or reason to believe that any such
notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a
location which could give rise to liability under any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in violation
of, or in a manner that could give rise to liability under, any applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be
named as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or
the Business.
(f) There has been no unremediated release or threat of release of
Materials of Environmental Concern at or from the Properties, or arising
from or related to the operations of the Borrower or any Subsidiary in
connection with the Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could give rise
to liability under Environmental Laws.
5.11 Use of Proceeds. The Term Loan shall be used to provide for general
corporate purposes not prohibited by this Credit Agreement.
5.12 Subsidiaries. Set forth on Schedule 5.12 is a complete and accurate
list of all Subsidiaries of the Borrower. The outstanding capital stock and
other equity interests of all such Subsidiaries is validly issued, fully paid
and nonassessable (except as provided in Section 180.0622(2)(b) of the Wisconsin
Statutes) and is owned, free and clear of all Liens.
5.13 Taxes. Each of the Borrower and its Subsidiaries has filed, or caused
to be filed, all tax returns (federal, state, local and foreign) required to be
filed and paid all taxes shown thereon to be due (including interest and
penalties), except for such taxes (i) which are not yet delinquent or (ii) as
are being contested in good faith and by proper proceedings, and against which
adequate reserves are being maintained in accordance with GAAP. The Borrower's
federal income tax liability has been finally determined by the Internal Revenue
Service for all taxable years up to and including the taxable year ended
December 31, 1991, and there is no threatened tax controversy or, to the best of
Borrower's knowledge, threatened tax controversy
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or dispute as of the date hereof which would have a Material Adverse Effect
except as disclosed in Schedule 5.13.
5.14 Solvency. The Borrower, individually, and the Borrower and its
Subsidiaries, collectively, are and, after execution of this Credit Agreement
and the GE Loan Agreement and after giving effect to the Indebtedness incurred
hereunder and under the GE Loan Agreement, will be Solvent.
5.15 Accuracy of Information. All information furnished by the Borrower to
the Lender is correct and complete in all material respects as of the date
furnished and does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make such information not misleading.
ARTICLE 6
AFFIRMATIVE COVENANTS
The Borrower hereby covenants and agrees that on the Closing Date, and
thereafter for so long as this Credit Agreement is in effect and until the
Obligations are paid in full, the Borrower shall, and in the case of subsections
6.2, 6.3, 6.4, 6.5, 6.6 and 6.7 shall cause each of its Subsidiaries, to:
6.1 Financial Statements. Maintain a standard and modern system of
accounting in accordance with sound accounting practice, and furnish to the
Lender such information respecting the business, assets and financial condition
of the Borrower and its Subsidiaries as the Lender may reasonably request and,
without request furnish to the Lender, or, in the case of Subsidiaries, cause
its Subsidiaries to furnish to the Lender:
(a) as soon as available, and in any event within 45 days after the
end of each of the first three quarters of Borrower's fiscal year, the
Borrower's Form 10-Q (prepared on a consolidated basis) as of the end of
each such quarter and a comparison of actual cash flow, income and capital
expenditures with corresponding amounts from the prior year for such
period, all in reasonable detail and certified as true, correct and
complete, subject to review and normal year-end adjustments, by the chief
financial officer of the Borrower;
(b) as soon as available, and in any event within 100 days after the
close of each fiscal year, a copy of the Borrower's Form 10-K (prepared on
a consolidated basis, which Form 10-K shall be accompanied by (i) the
unqualified opinion of independent certified public accountants of
recognized standing selected by the Borrower and acceptable to the Lender
to the effect that the statements present fairly, in all material respects,
the financial position of the Borrower as of the end of such year and the
results of its operations and its cash flows for the year then ended in
conformity with GAAP; (ii) a letter of such accountants stating that their
review of the financial covenants disclosed no Default or that their review
disclosed a Default and specifying the same and the action taken or
proposed to be taken with respect thereto; and (iii) any supplementary
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comments and reports submitted by such accountants to the Borrower
including the management letter, if any;
(c) as soon as available, and in any event within 45 days after the
close of each fiscal year, a budget of income and expenses prepared by the
Borrower for the current fiscal year, based on information and assumptions
that are accurate and reasonable as of the date hereof; and
(d) together with the financial statements described in Section 6.1(a)
and (b), the certificate of the president or chief financial officer of the
Borrower and to the effect that (i) a review of the activities of the
Borrower during such period has been made under his supervision to
determine whether the Borrower has observed, performed and fulfilled the
covenants set forth in Section 7.12, and (ii) no Default has occurred, with
respect to said covenants (or if such Default has occurred, specifying the
nature thereof and the period of existence thereof and the steps, if any,
being undertaken to correct the same).
All financial statements referred to herein shall be complete and correct in all
respects and shall be prepared in reasonable detail and on a consolidated basis
in accordance with GAAP, applied consistently throughout all accounting periods.
In addition, the Borrower shall cause ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ to provide a true and
complete copy of his personal financial statement on or before the end of each
of the Borrower's fiscal years.
6.2 Payment of Obligations. Subject to the exceptions set forth in Section
8(e), pay, discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all its material
obligations of whatever nature and any additional costs that are imposed as a
result of any failure to so pay, discharge or otherwise satisfy such material
obligations (including, without limitation, obligations to pay taxes), except
when the amount or validity of such obligations and costs is currently being
contested in good faith by appropriate proceedings and reserves, if applicable,
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be.
6.3 Conduct of Business and Maintenance of Existence. Except as otherwise
permitted by Section 7.4 or described on Schedule 6.3, continue to engage in
business of the same general type as now conducted by it on the date hereof and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business; comply with all
Contractual Obligations and Requirements of Law applicable to it except to the
extent that failure to comply therewith would not, in the aggregate, have a
Material Adverse Effect.
6.4 Maintenance of Property; Insurance. Keep all material property useful
and necessary in its business in good working order and condition (ordinary wear
and tear excepted); maintain with financially sound and reputable insurance
companies insurance on all its material property in at least such amounts and
against at least such risks as are usually insured against in the same general
area by companies engaged in the same or a similar business; and furnish to the
Lender, upon written request, full information as to the insurance carried.
- 26 -
6.5 Inspection of Property; Books and Records; Discussions. Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its businesses and activities; and permit the
Lender, during regular business hours and upon reasonable notice, to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records at any time and as often as may be desired, and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.
6.6 Notices. Give notice to Lender of:
(a) immediately (and in any event within two (2) Business Days) after
the Borrower knows or has reason to know thereof, the occurrence of any
Default or Event of Default;
(b) promptly, any default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries which would
reasonably be expected to have a Material Adverse Effect;
(c) promptly, any litigation, or any investigation or proceeding
(including, without limitation, any environmental proceeding) known to the
Borrower, affecting the Borrower or any of its Subsidiaries which, if
adversely determined, would reasonably be expected to have a Material
Adverse Effect;
(d) as soon as possible and in any event within 30 days after the
Borrower knows or has reason to know thereof: (i) the occurrence or
expected occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan;
(e) as soon as possible in advance of, and in any event before the
effectiveness of, any proposed increase or decrease in the principal
committed amount under or in respect of the GE Loan Agreement; and
(f) promptly, any other development or event which would reasonably be
expected to have a Material Adverse Effect; and
(g) promptly, any amendment to the GE Loan Agreement.
Each notice pursuant to this subsection shall be accompanied by a statement of a
responsible officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
- 27 -
6.7 Environmental Laws.
(a) Comply in all material respects with, and ensure compliance in all
material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws except to the extent that, with respect to
all of the above, failure to do so would not reasonably be expected to have
a Material Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested
in good faith by appropriate proceedings and the pendency of such
proceedings would not reasonably be expected to have a Material Adverse
Effect; and
(c) Defend, indemnify and hold harmless the Lender and its employees,
agents, officers and directors, from and against any and all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising out of, or in any way relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to
the operations of the Borrower, any of its Subsidiaries or the Properties,
or any orders, requirements or demands of Governmental Authorities related
thereto, including, without limitation, reasonable attorneys' fees and
consultant's fees, investigation and laboratory fees, response costs, court
costs and litigation expenses, except to the extent that any of the
foregoing arise out of the gross negligence or willful misconduct of the
party seeking indemnification therefor. The agreements in this paragraph
shall survive repayment of the Note and all other amounts payable
hereunder.
ARTICLE 7
NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that on the Closing Date, and
thereafter for so long as this Credit Agreement is in effect and until the
Obligations are paid in full:
7.1 Indebtedness. The Borrower will not, nor will it permit any Subsidiary
to, contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Credit Agreement and
the other Credit Documents;
(b) Indebtedness existing as of the Closing Date and set out in
Schedule 7.1(b) and renewals, refinancings or extensions thereof in a
principal amount not in excess of that outstanding as of the date of such
renewal, refinancing or extension;
- 28 -
(c) Indebtedness incurred after the Closing Date consisting of Capital
Leases or Indebtedness incurred to provide all or a portion of the purchase
price or cost of construction of an asset provided that (i) such
Indebtedness when incurred shall not exceed the purchase price or cost of
construction of such asset; (ii) no such Indebtedness shall be refinanced
for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing; and (iii) the total aggregate
principal amount of all such Indebtedness of the Borrower and its
Subsidiaries, as a group, shall not exceed $5,000,000 at any time
outstanding;
(d) Indebtedness and obligations relating to currency protection
agreements and commodity purchase or option agreements in order to manage
existing or anticipated interest rate, exchange rate or commodity price
risks and not for speculative purposes;
(e) Subordinated Debt of the Borrower, the terms of subordination and
other terms and provisions of which are acceptable to the Lender in its
reasonable discretion;
(f) Indebtedness incurred by the Borrower in connection with Permitted
Sale-Leaseback Transactions, provided that the aggregate amount of such
Indebtedness shall not exceed $5,000,000 at any time outstanding;
(g) Indebtedness secured by Permitted Liens, except as otherwise
limited by this Section; and
(h) Indebtedness arising or existing under the GE Loan Agreement (and
the documents relating thereto).
7.2 Liens. The Borrower will not, nor will it permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of its property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens.
7.3 Nature of Business. Except as described on Schedule 6.3 or as otherwise
permitted by Section 7.4, the Borrower will not, nor will it permit any
Subsidiary to, alter the character of its business in any material respect from
that conducted as of the Closing Date.
7.4 Consolidation, Merger or Sale of Assets, etc. The Borrower will not,
nor will it permit any Subsidiary to,
(a) dissolve, liquidate or wind up its affairs, sell, transfer, lease
or otherwise dispose of any substantial part of its property or assets
outside of the ordinary course of business or agree to do so at a future
time except the following, without duplication, shall be expressly
permitted:
(i) Specified Sales;
(ii) the sale, transfer, lease or other disposition of property
or assets not in the ordinary course of business (other than Specified
Sales), where and to the extent that such transaction is the result of
a Recovery Event and the Net
- 29 -
Proceeds therefrom are used to repair or replace damaged property or
to purchase or otherwise acquire new assets or property provided that
such purchase or acquisition is committed to within 120 days of
receipt of the Net Proceeds from the Recovery Event and such purchase
or acquisition is consummated within 180 days of such receipt; and
(iii) the sale, lease or transfer of property or assets by a
Subsidiary to the Borrower.
As used herein, "substantial part" shall mean property and assets, the book
value of which, when added to the book value of all other assets sold, leased or
otherwise disposed of by the Borrower and its Subsidiaries (other than in the
ordinary course of business), shall in any fiscal year exceed 10% of
Consolidated Tangible Assets, in each case determined as of the end of the
immediately preceding fiscal year; or
(b) enter into any transaction of merger or consolidation, except for
(i) the merger or consolidation of the Borrower with or into one of its
Subsidiaries, provided that in any such case the Borrower shall be the
surviving entity, and (ii) the merger or consolidation of any wholly-owned
Subsidiary with or into any other wholly-owned Subsidiary or other entity
which thereupon becomes a wholly-owned Subsidiary (subject to the terms of
Section 7.8 hereof).
Lender will agree to terminate its Liens with respect to any sales or
dispositions otherwise permitted under this Agreement upon its receipt of any
Net Proceeds required hereunder.
7.5 Advances, Investments and Loans. The Borrower will not, nor will it
permit any Subsidiary to, lend money or extend credit or make advances to any
Person, or purchase or acquire any stock, obligations or securities of, or any
other interest in, or make any capital contribution to, any Person except for
Permitted Investments.
7.6 Guarantee Obligations. The Borrower will not, nor will it permit any
Subsidiary to, contract, create, incur, assume or permit to exist any Guarantee
Obligations, except Permitted Guarantee Obligations.
7.7 Transactions with Affiliates. Except as permitted in subsection (iii)
of the definition of Permitted Investments and loans described on Schedule
7.1(b), the Borrower will not, nor will it permit any Subsidiary to, enter into
any transaction or series of transactions, whether or not in the ordinary course
of business, with any officer, director, shareholder or Affiliate other than on
terms and conditions substantially as favorable as would be obtainable in a
comparable arm's-length transaction with a Person other than an officer,
director, shareholder or Affiliate.
7.8 Ownership of Subsidiaries. The Borrower will not, nor will it permit
any Subsidiary to, create, form or acquire a Subsidiary without the prior
written consent of the Lender.
7.9 Fiscal Year. The Borrower will not, nor will it permit any Subsidiary
to, change its fiscal year, except with the prior written consent of the Lender.
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7.10 Prepayments of Indebtedness, etc. The Borrower will not, nor will it
permit any Subsidiary to,
(a) after the issuance thereof, amend or modify, or permit the
amendment or modification of, any of the terms of subordination or other
terms or provisions relating to any Subordinated Debt; or
(b) make (or give notice with respect thereto) any voluntary or
optional payment or prepayment or redemption or acquisition for value
including, without limitation, by way of depositing money or securities
with the trustee with respect thereto before due for the purpose of paying
when due) or refund, refinance or exchange of any Subordinated Debt
permitted pursuant to Section 7.1.
As used herein, "Subordinated Debt" means any indebtedness for borrowed money
which by its terms is, or upon the happening of certain events may become,
subordinated in right of payment to the Obligations hereunder and other amounts
owing hereunder or in connection herewith; provided, that "Subordinated Debt"
shall not be deemed to include indebtedness evidenced by or arising under the GE
Loan Agreement.
7.11 Dividends. The Borrower will not, nor will it permit any
non-wholly-owned Subsidiaries to, make any payment, distribution or dividend
(other than a dividend or distribution payable solely in stock or equity
interest of the Person making the dividend or distribution) on or any payment on
account of the purchase, redemption or retirement of, or any other distribution
on, any partnership interest, share of any class of stock or other ownership
interest in such Person if there shall exist any Default or Event of Default or
if the making of any such payment, dividend or distribution would cause a
Default or Event of Default to occur.
7.12 Financial Covenants. Borrower will not breach or fail to comply with
any of the following financial covenants, each of which shall be calculated in
accordance with GAAP consistently applied:
(a) Maximum Capital Expenditures. Borrower and its Subsidiaries on a
consolidated basis shall not make Capital Expenditures during the following
periods that exceed in the aggregate $3,500,000 in any fiscal year.
(b) Minimum Tangible Net Worth. Borrower and its Subsidiaries on a
consolidated basis shall have, at the end of each fiscal quarter set forth
below, Tangible Net Worth equal to or greater than:
$23,882,000 as of fiscal quarter ending on or about September 30,
2001;
$25,920,000 as of fiscal quarter ending on or about December 31, 2001;
$21,920,000 as of fiscal quarter ending on or about March 31, 2002;
$21,920,000 as of fiscal quarter ending on or about June 30, 2002;
$23,920,000 as of fiscal quarter ending on or about September 30,
2002;
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$25,920,000 as of fiscal quarter ending on or about December 31, 2002;
$21,920,000 as of fiscal quarter ending on or about March 31, 2003;
$21,920,000 as of fiscal quarter ending on or about June 30, 2003;
$23,920,000 as of fiscal quarter ending on or about September 30,
2003;
$25,920,000 as of fiscal quarter ending on or about December 31, 2003;
$21,920,000 as of the end of each fiscal quarter occurring thereafter.
ARTICLE 8
EVENTS OF DEFAULT
Upon the occurrence of any of the following events (each an "Event of
Default"):
(a) The Borrower shall fail to pay any principal on the Note when due
in accordance with the terms thereof or hereof; or the Borrower shall fail
to pay any interest on the Note or any Fee or other amount payable
hereunder when due in accordance with the terms thereof or hereof and such
failure shall continue unremedied for five (5) Business Days; or
(b) Any representation or warranty made or deemed made by the Borrower
herein or in any of the other Credit Documents to which it is a party (or
by ▇▇▇▇▇▇ in any of the Credit Documents to which it is a party), or which
is contained in any certificate, document or financial or other statement
furnished by the Borrower or ▇▇▇▇▇▇ at any time under or in connection with
this Credit Agreement shall prove to have been incorrect, false or
misleading in any material respect on or as of the date made or deemed
made; or
(c) The Borrower shall (i) default in the due performance or
observance of Sections 6.1, 6.2, 6.3, 7.1, 7.2, 7.4, 7.6, 7.10, 7.11 or
7.12 or (ii) default in the observance or performance of any other term,
covenant or agreement contained in this Credit Agreement (other than as
described in subsections 8(a), 8(b) or 8(c)(i) above), and such default
shall continue unremedied for a period of 30 days or more after written
notice thereof from the Lender; or
(d) An Event of Default (as defined in the GE Loan Agreement) shall
have occurred under or in respect of the GE Loan Agreement, including
without limitation, a default under Section 5.10 thereof; or
(e) The Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on any Indebtedness (other than the
Note) in a principal amount outstanding of at least $500,000 in the
aggregate for the Borrower and its Subsidiaries or in the payment of any
matured Guarantee Obligation in a principal amount outstanding of at least
$500,000 in the aggregate for the Borrower and its Subsidiaries beyond the
period
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of grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee Obligation was created
and such Indebtedness or Guarantee Obligation has matured by its terms or
is accelerated or is overtly threatened to be accelerated (except any such
matured Guarantee Obligations which the Borrower and its Subsidiaries are
disputing in good faith and for which they have established adequate
reserves); or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness in a principal
amount outstanding of at least $500,000 in the aggregate for the Borrower
and its Subsidiaries or Guarantee Obligation in a principal amount
outstanding of at least $500,000 in the aggregate for the Borrower and its
Subsidiaries or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause,
or the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Guarantee Obligation or a trustee or Lender on behalf
of such holder or holders or beneficiary or beneficiaries shall cause or
overtly threaten to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become payable; or
(f) (i) The Borrower shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or the Borrower shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against the Borrower any
case, proceeding or other action of a nature referred to in clause (i)
above which (X) results in the entry of an order for relief or any such
adjudication or appointment or (Y) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
the Borrower any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) the Borrower shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth
in clause (i), (ii), or (iii) above; or (v) the Borrower shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay
its debts as they become due; or
(g) One or more judgments or decrees shall be entered against the
Borrower and such judgments or decrees shall not have been paid and
satisfied, vacated, discharged, stayed or bonded pending appeal within 60
days from the entry thereof and involve in the aggregate a liability (to
the extent not paid when due or covered by insurance) of $500,000 or more;
or
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(h) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Lender, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower, any of its Subsidiaries or
any Commonly Controlled Entity shall, or in the reasonable opinion of the
Lender is likely to, incur any liability in connection with a withdrawal
from, or the Insolvency or Reorganization of, any Multiemployer Plan or
(vi) any other similar event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could reasonably be expected to have a Material Adverse Effect; or
(i) Any Credit Document shall fail to be in full force and effect or
to give the Lender the rights, powers and privileges reasonably purported
to be created thereby;
Then, and in any event, (A) if such event is an Event of Default specified
in paragraph (f) above, automatically the Term Loan (with accrued interest
thereon), and all other amounts owing under this Credit Agreement and the
other Credit Documents shall immediately become due and payable, and (B) if
such event is any other Event of Default, the Lender may, by notice to the
Borrower, declare the Term Loan to be terminated forthwith, whereupon the
Term Loan (with accrued interest thereon) and all other amounts owing under
this Credit Agreement and the Credit Documents shall immediately become due
and payable. Except as expressly provided above in this Section 9,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
ARTICLE 9
MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Credit Agreement, nor the Note,
nor any of the other Credit Documents, nor any terms hereof or thereof may be
amended, supplemented, waived or modified except in accordance with the
provisions of this subsection. The Lender may, from time to time, (a) enter into
with the Borrower or ▇▇▇▇▇▇, as applicable, written amendments, supplements or
modifications hereto and to the other Credit Documents for the purpose of
adding, amending or deleting any provisions of this Credit Agreement or the
other Credit Documents or (b) waive, on such terms and conditions as the Lender
may specify in such instrument, any of the requirements of this Credit Agreement
or the other Credit Documents or any Default or Event of Default and its
consequences. Any such waiver, amendment, supplement or modification shall be
binding upon the Borrower or ▇▇▇▇▇▇, as applicable, and the Lender and all
future holders of the Note. In the case of any waiver, the Borrower and the
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Lender shall be restored to their former position and rights hereunder and under
the Term Loan and Note and other Credit Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
9.2 Notices. Except as otherwise provided in Article 3, all notices,
requests and demands to or upon the respective parties hereto to be effective
shall be in writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made (i) when
delivered by hand, (ii) when transmitted via telecopy (or other facsimile
device) on a Business Day between the hours of 8:30 A.M. and 5:00 P.M.
(Milwaukee, Wisconsin time) or on the following Business Day (if sent after 5:00
P.M. Milwaukee, Wisconsin time) to the number set out herein, (iii) the day
following the day on which the same has been delivered prepaid to a reputable
national overnight air courier service, or (iv) the third Business Day following
the day on which the same is sent by certified or registered mail, postage
prepaid, in each case, addressed as follows in the case of the Borrower and the
Lender, or to such other address as may be hereafter notified by the respective
parties hereto and any future holders of the Note:
The Borrower: LaCrosse Footwear, Inc.
▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Lender: Firstar Bank, N.A.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
9.4 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Credit Agreement and the Note and the making of the Term
Loan, provided that all such representations and warranties shall terminate on
the date upon which all amounts owing hereunder and under the Term Note have
been paid in full.
9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Lender for the costs and expenses of its counsel incurred in
connection with the preparation and execution of the Credit Documents and the
consummation of the transactions contemplated thereby in an amount not to exceed
$10,000 and to pay or reimburse the Lender for all of its reasonable costs and
expenses (including reasonable attorneys' fees) incurred in connection with any
amendment, supplement or modification to the Credit Documents and any other
documents prepared in connection herewith or therewith,(b) to pay or reimburse
the Lender for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Credit Agreement and any
other Credit Documents, including, without limitation, the reasonable fees and
disbursements of counsel to the Lender (including reasonable allocated costs of
in-house legal counsel), (c) on demand, to pay, indemnify, and hold the Lender
and its Affiliates harmless from, any and all recording and filing fees and any
and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, the Credit Documents and any such other documents, and (d) to
pay, indemnify, and hold the Lender and its Affiliates, officers, directors,
shareholders, employees and agents harmless from and against, any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of the
Credit Documents and any such other documents and the use, or proposed use, of
proceeds of the Term Loan (all the foregoing, collectively, the "Indemnified
Liabilities"); provided, however, that the Borrower shall not have any
obligation hereunder to the Lender with respect to Indemnified Liabilities
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arising from (i) the gross negligence or willful misconduct of the Lender, or
(ii) the violation by the Lender of an express provision of the Credit
Documents, if so determined by a final judgment of a court of competent
jurisdiction. The agreements in this Section 9.5 shall survive repayment of the
Term Loan, the Note and all other amounts payable hereunder.
9.6 Successors and Assigns. This Credit Agreement shall be binding upon and
inure to the benefit of the Borrower and the Lender, all future holders of the
Note and their respective successors and assigns, except that the Borrower may
not assign or transfer any of its rights or obligations under this Credit
Agreement or the other Credit Documents to which it is a party without the prior
written consent of the Lender and the Lender may not assign or transfer any of
its rights or obligations under this Credit Agreement or the other Credit
Documents without the prior written consent of the Borrower, in each case, which
consent shall not be unreasonably withheld.
9.7 Set-off. In addition to any rights and remedies of the Lender provided
by law (including, without limitation, other rights of set-off), the Lender
shall have the right, without prior notice to the Borrower, any such notice
being expressly waived by the Borrower to the extent permitted by applicable
law, upon the occurrence and during the continuance of any Event of Default, to
setoff and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Lender or any Affiliate, branch or agency thereof to or for the
credit or the account of the Borrower, or any part thereof in such amounts as
the Lender may elect, against and on account of the obligations and liabilities
of the Borrower to the Lender hereunder and claims of every nature and
description of the Lender against the Borrower, in any currency, whether arising
hereunder, under the Note or under any documents contemplated by or referred to
herein or therein, as the Lender may elect, whether or not the Lender has made
any demand for payment. The aforesaid right of set-off may be exercised by the
Lender against the Borrower or against any trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receiver or execution,
judgment or attachment creditor of the Borrower, or against anyone else claiming
through or against the Borrower or any such trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by the Lender prior to the occurrence of
any Event of Default. The Lender agrees promptly to notify the Borrower after
any such set-off and application made by the Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application.
9.8 Confidentiality. The Lender shall use its best efforts to hold in
confidence any material nonpublic information delivered or made available to it
by the Borrower. Notwithstanding the foregoing, nothing herein shall prevent the
Lender from disclosing any information delivered or made available to it by the
Borrower (a) to the Lender's Affiliates, (b) upon the order of any court or
administrative agency, (c) upon the request or demand of any regulatory agency
or authority, (d) which has been publicly disclosed other than as a result of a
disclosure by the Lender which is not permitted by this Credit Agreement, (e) to
the extent reasonably required in connection with any litigation to which the
Lender or any of its Affiliates may be a party, along with the Borrower, any
Subsidiary or any of their respective Affiliates,
- 37 -
(f) to the extent reasonably required in connection with the exercise of any
right or remedy under this Credit Agreement, and (g) to the Lender's legal
counsel and financial consultants and independent auditors.
9.9 Table of Contents and Section Headings. The table of contents and the
Section and subsection headings herein are intended for convenience only and
shall be ignored in construing this Credit Agreement.
9.10 Counterparts. This Credit Agreement may be executed by one or more of
the parties to this Credit Agreement on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument
9.11 Severability. Any provision of this Credit Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.12 Integration. This Credit Agreement, the Note and the other Credit
Documents represent the agreement of the Borrower and the Lender with respect to
the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Borrower or the Lender relative to the
subject matter hereof not expressly set forth or referred to herein or in the
Note.
9.13 Governing Law. This Credit Agreement and the Note and the rights and
obligations of the parties under this Credit Agreement and the Note shall be
governed by, and construed and interpreted in accordance with, the internal laws
of the State of Wisconsin without giving effect to its conflicts of law
provisions.
9.14 Consent to Jurisdiction and Venue. All judicial proceedings brought
against the Borrower with respect to this Credit Agreement, the Note or any of
the other Credit Documents shall be brought in any state or federal court of
competent jurisdiction in the State of Wisconsin, and, by execution and delivery
of this Credit Agreement, the Borrower accepts, for itself and in connection
with its properties, generally and unconditionally, the exclusive jurisdiction
of the aforesaid courts and irrevocably agrees to be bound by any final judgment
rendered thereby in connection with this Credit Agreement from which no appeal
has been taken or is available. The Borrower and the Lender irrevocably waive
any objection, including, without limitation, any objection to the laying of
venue or based on the grounds of forum non conveniens which it may now or
hereafter have to the bringing of any such action or proceeding in any such
jurisdiction. Nothing herein shall limit the right of the Lender to bring
proceedings against the Borrower in the court of any other jurisdiction.
9.15 Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of each Credit Document;
- 38 -
(b) the Lender does not have any fiduciary relationship with or duty
to the Borrower arising out of or in connection with this Credit Agreement
and the relationship between the Lender, on one hand, and the Borrower, on
the other hand, in connection herewith is solely that of debtor and
creditor; and
(c) no joint venture exists between the Borrower and the Lender.
9.16 Waivers of Jury Trial. THE BORROWER AND THE LENDER HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS CREDIT AGREEMENT OR ANY
OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
9.17 Limitation of Liability. THE BORROWER AND THE LENDER HEREBY WAIVE ANY
RIGHT ANY OF THEM MAY HAVE TO CLAIM OR RECOVER FROM THE OTHER PARTY ANY
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.
- 39 -
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: LACROSSE FOOTWEAR, INC.,
--------
a Wisconsin corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Title: VP-Finance and Administration
and Chief Financial Officer
------------------------------
LENDER: FIRSTAR BANK, N.A.
------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Vice President
-----------------------------
- 40 -