Exhibit 4.8
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CREDIT AGREEMENT
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among
CHROMCRAFT REVINGTON, INC.
and
THE LENDERS PARTY HERETO
and
NATIONAL CITY BANK OF INDIANA, AS AGENT
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Dated as of March 12, 2002
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TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS...........................................................................................1
1.1. Defined Terms...................................................................................1
1.2. Rules of Construction..........................................................................14
1.3. Accounting Terms...............................................................................14
ARTICLE 2. CREDIT...............................................................................................14
2.1. Commitments....................................................................................14
(a) Revolving Commitment..................................................................14
(b) Swing Line Loans/Mandatory Funding....................................................14
(c) Term Loan Commitment..................................................................15
2.2. Interest ......................................................................................15
(a) Revolving Commitment..................................................................15
(b) Swing Line Loans......................................................................16
(c) Term Loan.............................................................................16
(d) General...............................................................................16
2.3. Payments of Principal and Interest.............................................................16
(a) Revolving Commitment..................................................................16
(b) Swing Line Loans......................................................................17
(c) Term Loan....... .....................................................................17
(d) Mandatory Prepayments and Reductions..................................................17
(e) Optional Prepayments..................................................................18
(f) Method of Payment.....................................................................18
(g) Banking Day...........................................................................18
2.4. Method of Advance..............................................................................19
(a) Revolving Commitment..................................................................19
(b) Swing Line Loans......................................................................19
(c) Term Loan...... .....................................................................20
(d) General...............................................................................20
2.5. Procedures for Electing LIBOR Optional Rates...................................................20
2.6. Fees ......................................................................................22
(a) Commitment Fee - Revolving Commitment.................................................22
(b) Up Front Fees.........................................................................22
(c) Agent and Arrangement Fees............................................................22
(d) Rates Applicable After Default........................................................22
2.7. Reductions of Revolving Commitment.............................................................23
2.8. Non-Receipt of Funds by the Agent..............................................................23
(a) From the Lenders......................................................................23
(b) From Borrower.........................................................................23
2.9. Issuance of Letters of Credit..................................................................24
2.10. Letters of Credit Participation and Fees.......................................................25
2.11. Reimbursement of Letters of Credit.............................................................26
2.12. Use of Proceeds................................................................................27
2.13 Lending Installations..........................................................................27
ARTICLE 3. SECURITY AND GUARANTY................................................................................27
3.1. Collateral.....................................................................................27
3.2. Guaranty.......................................................................................28
SECTION 4. REPRESENTATIONS AND WARRANTIES.......................................................................28
4.1. Organization; Corporate Powers.................................................................28
4.2. Authority......................................................................................28
4.3. No Conflict....................................................................................29
4.4. Financial Statements...........................................................................29
4.5. No Material Adverse Change.....................................................................29
4.6. Taxes..........................................................................................29
(a) Tax Examinations...........................................................................29
(b) Payment of Taxes...........................................................................30
4.7. Litigation; Loss Contingencies and Violations..................................................30
4.8. Subsidiaries...................................................................................30
4.9. ERISA..........................................................................................31
4.10. Accuracy of Information........................................................................32
4.11. Material Agreements............................................................................32
4.12. Compliance with Laws...........................................................................32
4.13. Assets and Properties..........................................................................32
4.14. Insurance......................................................................................32
4.15. Environmental Matters..........................................................................32
4.16. Solvency.......................................................................................33
4.17. Indebtedness...................................................................................33
4.18. Contracts of Surety............................................................................33
4.19. Licenses.......................................................................................33
4.20. Force Majeure..................................................................................34
4.21. Margin Stock...................................................................................34
4.22. Approvals......................................................................................34
4.23. Regulation.....................................................................................34
4.24. Special Stock Redemption.......................................................................34
4.25. ESOP...........................................................................................34
4.26. General........................................................................................35
4.27. Supplemental Disclosure........................................................................35
SECTION 5. COVENANTS............................................................................................35
5.1. Affirmative Covenants..........................................................................35
(a) Financial Reporting...................................................................35
(b) Good Standing.........................................................................37
(c) Taxes, Etc............................................................................37
(d) Maintain Properties...................................................................37
(e) Insurance .....................................................................37
(f) Books and Records.....................................................................37
(g) Reports...............................................................................38
(h) Licenses..............................................................................38
(i) Notice of Material Adverse Change.....................................................38
(j) Conduct of Business...................................................................38
(k) Compliance with Laws..................................................................38
(l) Use of Proceeds.......................................................................38
(m) Loan Payments.........................................................................38
(n) Notice of Environmental Matters/Environmental Audits..................................38
(o) Banking Accounts......................................................................39
(p) ESOP..................................................................................39
(q) Title Insurance.......................................................................40
(r) Survey................................................................................40
(s) Post-Closing Covenant.................................................................41
5.2. Negative Covenants.............................................................................41
(a) Dispose of Property...................................................................41
(b) Further Encumber......................................................................41
(c) Dividends.............................................................................41
(d) Purchase Stock........................................................................41
(e) Borrowings............................................................................41
(f) Loans, Etc............................................................................41
(g) Contingent Obligations................................................................42
(h) Merger, Acquisitions, Etc.............................................................42
(i) Change Name and Place of Business.....................................................43
(j) Accounting Policies...................................................................43
(k) Change of Business....................................................................43
(l) Benefit Plans.........................................................................43
(m) ESOP..................................................................................43
(n) Transactions with Affiliates..........................................................43
(o) Sales and Leasebacks..................................................................43
(p) Corporate Documents...................................................................44
(q) Restrictive Agreements................................................................44
5.3. Financial Covenants............................................................................44
(a) Consolidated Tangible Net Worth.......................................................44
(b) Leverage Ratio........................................................................44
(c) Fixed Charge Coverage Ratio...........................................................44
ARTICLE 6. CONDITIONS PRECEDENT TO LOANS........................................................................44
6.1 Conditions to Initial Advance..................................................................44
(a) Authorization.........................................................................44
(b) Loan Documents........................................................................45
(c) Guaranty..............................................................................45
(d) Incumbency Certificates...............................................................45
(e) Opinions of Counsel...................................................................45
(f) UCC Searches..........................................................................45
(g) Regulation U..........................................................................45
(h) Compliance Certificate................................................................45
(i) Fees..................................................................................45
(j) Termination of Existing Credit Agreement..............................................45
(k) Insurance Certificate.................................................................45
(l) Repurchase Documents..................................................................46
(m) Leverage Ratio........................................................................46
(n) Additional Documentation..............................................................46
(o) Certificate of No Default.............................................................46
(p) Valuation and Fairness Opinions.......................................................46
6.2 Conditions to Subsequent Advances..............................................................46
(a) No Default............................................................................46
(b) Representations and Warranties........................................................46
(c) Legal Matters.........................................................................46
(d) Expenses..............................................................................46
6.3 Special Conditions to Advances for Permitted Acquisitions......................................46
(a) Written Requests......................................................................46
(b) Acquisition Documents.................................................................47
(c) Representations of Target's Financial Statements......................................47
(d) Expenses..............................................................................47
ARTICLE 7. DEFAULT..............................................................................................47
SECTION 8. REMEDY...............................................................................................50
8.1. Acceleration...................................................................................50
8.2. Deposit to Secure Reimbursement Obligations....................................................50
8.3 Subrogation....................................................................................51
8.4. Preservation of Rights.........................................................................51
8.5. Actions by the Agent/Default Rate..............................................................51
SECTION 9. THE AGENT............................................................................................51
9.1. Appointment; Nature of Relationship............................................................51
9.2. Powers.........................................................................................52
9.3. General Immunity...............................................................................52
9.4. No Responsibility for Loans, Recitals, etc.....................................................52
9.5. Action on Instructions of Lenders..............................................................52
9.6. Employment of Agents and Counsel...............................................................53
9.7. Reliance on Documents; Counsel.................................................................53
9.8. Agent's Reimbursement and Indemnification......................................................53
9.9. Notice of Default..............................................................................53
9.10. Rights as a Lender.............................................................................53
9.11. Lender Credit Decision.........................................................................54
9.12. Successor Agent................................................................................54
9.13. Delegation to Affiliates.......................................................................55
9.14. Execution of Collateral Documents..............................................................55
9.15. Collateral Releases............................................................................55
SECTION 10. SET OFF; RATABLE PAYMENTS...........................................................................55
10.1. Set Off........................................................................................55
10.2. Ratable Payments...............................................................................55
10.3. Ratable Benefit................................................................................56
10.4. Liquidation of Collateral......................................................................56
10.5. Adjustments....................................................................................56
SECTION 11. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS...................................................56
11.1. Successors and Assigns.........................................................................56
11.2. Participations.................................................................................57
(a) Permitted Participations; Effect......................................................57
(b) Voting Rights.........................................................................57
(c) Benefit of Set-off....................................................................57
11.3. Assignments....................................................................................58
(a) Permitted Assignments.................................................................58
(b) Effect; Effective Date................................................................58
11.4. Dissemination of Information...................................................................59
11.5. Tax Treatment..................................................................................59
SECTION 12. GENERAL PROVISIONS..................................................................................59
12.1. Waivers, Amendments and Remedies...............................................................59
12.2. Survival of Representations....................................................................59
12.3. Governmental Regulation........................................................................59
12.4. Taxes..........................................................................................60
12.5. Choice of Law..................................................................................60
12.6. Headings.......................................................................................60
12.7. Entire Agreement...............................................................................60
12.8. Expenses.......................................................................................60
12.9. Indemnification................................................................................60
12.10. Confidentiality................................................................................61
12.11. Giving Notice..................................................................................61
12.12. Counterparts...................................................................................61
12.13. Incorporation by Reference.....................................................................61
12.14. Time of Essence................................................................................62
12.15. No Joint Venture...............................................................................62
12.16. Severability...................................................................................62
12.17. Waiver of Setoff...............................................................................62
12.18. Gender.........................................................................................62
12.19. Lenders Not in Control.........................................................................62
12.20. Additional Amounts Payable.....................................................................62
12.21. Application of Proceeds........................................................................63
12.22. Foreign Lender Withholding Tax.................................................................63
12.23. Replacement of Lenders.........................................................................63
12.24. Relationship of Parties; Mutual Release of Consequential Damages...............................64
12.25. Waiver of Jury Trial...........................................................................64
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of the 12th day of March, 2002, among
CHROMCRAFT REVINGTON, INC., a Delaware corporation (the "Borrower"), the Lenders
party hereto, and NATIONAL CITY BANK OF INDIANA, a national banking association,
as agent for the Lenders hereunder (in such capacity, the "Agent"). The parties
agree as follows:
ARTICLE 1. DEFINITIONS
Section 1.1 Defined Terms. As used in this Agreement:
"Adjusted LIBOR" means, for each LIBOR Loan, the rate per annum
(rounded up, if necessary, to the nearest 1/16%) determined by the Agent to be
equal to the quotient of (a) the LIBOR divided by (b) 1 minus the Reserve
Requirement.
"Advance" means a disbursement of proceeds of the Loans.
"Affiliate" means, with respect to any Person, any other Person (a)
directly or indirectly through one or more intermediaries, controlling,
controlled by, or under common control with, such Person, and (b) that directly
or indirectly owns more than Ten Percent (10%) of any class of the voting
securities or Capital Stock of or equity interests in such Person. A Person
shall be deemed to control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agent" means National City Bank of Indiana, in its capacity as agent
for the Lenders hereunder, and any successor Agent appointed pursuant to this
Agreement.
"Agreement" means this Credit Agreement, as amended from time to time.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (a) the Prime Rate for such day, or (b) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Alternate Base Rate Loan" means any Loan when and to the extent that
the interest rate thereof is determined by reference to the Alternate Base Rate.
"Applicable Margin" and "Applicable Fee" is determined by reference to
the following tables:
Applicable Margin
Applicable Margin for Alternate Base
Leverage Ratio for LIBOR Loans Rate Loans
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Equal to or greater than
2.50 to 1.00 2.50% .75%
Less than 2.50 to 1.00
but greater than or equal
to 2.00 to 1.00 2.125% .50%
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CREDIT AGREEMENT PAGE 1
Less than 2.00 to 1.00
but greater than or equal
to 1.50 to 1.00 1.75% .25%
Less than 1.50 to 1.00
but greater than or equal
to 1.00 to 1.00 1.375% -0-
Less than 1.00 to 1.00 1.00% -0-
Applicable Fee Applicable Fee
for Standby Letters for Commitment
Leverage Ratio of Credit Fee
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Equal to or greater than
2.50 to 1.00 2.50% .50%
Less than 2.50 to 1.00
but greater than or equal
to 2.00 to 1.00 2.125% .375%
Less than 2.00 to 1.00
but greater than or equal
to 1.50 to 1.00 1.75% .25%
Less than 1.50 to 1.00
but greater than or equal
to 1.00 to 1.00 1.375% .25%
Less than 1.00 to 1.00 1.00% .20%
The Applicable Margin and the Applicable Fee shall initially be
determined based on a Leverage Ratio less than 2.50 to 1.00 but greater than
2.00 to 1.00. The Applicable Margin and the Applicable Fee shall be subject to
adjustment quarterly commencing with Borrower's Financial Statements as of the
fiscal quarter ending March 31, 2002. Adjustments, if any, to the Applicable
Margin and the Applicable Fee shall be effective five (5) Banking Days after the
Agent has received Borrower's Financial Statements delivered to the Lenders
pursuant to Section 5.1(a) hereof for the immediately preceding fiscal quarter.
In the event the Lenders have not received the required Financial Statements
pursuant to Section 5.1(a) hereof within the time periods provided therein, the
maximum Leverage Ratio and the highest Applicable Margin and Applicable Fee set
forth in the foregoing tables shall be conclusively presumed to be correct until
five (5) Banking Days after the applicable Financial Statements are so
delivered. In no event shall the Applicable Margin and the Applicable Fee be
adjusted downward if there exists a Default on the date on which such downward
adjustment would otherwise become effective until such time as the Default has
been cured, waived or ceases to exist. The provisions of this definition are not
intended to, and shall not be construed to, authorize any violation by Borrower
of Section 5.3(b) hereof or to constitute a waiver thereof or any commitment by
the Lenders to waive any violation by Borrower of Section 5.3(b) hereof.
"Authorized Officer" means any officer or employee of Borrower whose
authority to perform acts to be performed only by an Authorized Officer under
the terms of this Agreement are evidenced by (a) a certified copy of an
appropriate resolution of the Board of Directors of Borrower, or (b) a written
authorization specifying an employee of Borrower signed by an Authorized
Officer.
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CREDIT AGREEMENT PAGE 2
"Banking Day" means a day on which the principal domestic office of all
the Lenders is open for the purpose of conducting substantially all of its
business activities, and, if the applicable day relates to a LIBOR Loan, LIBOR
Interest Period, or notice with respect to a LIBOR Loan, a day on which dealings
in U.S. dollar deposits are carried on in the London interbank market and
Lenders are open for business in London.
"Borrower" shall have the meaning ascribed in the first paragraph of
this Agreement.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interest, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Capitalized Lease" means any lease of property which would be
capitalized on a balance sheet of a Person prepared in accordance with GAAP.
"Capitalized Lease Obligations" means the amount of the obligations of
a Person under Capitalized Leases which would be shown as liabilities on a
balance sheet of such Person prepared in accordance with GAAP.
"Change in Control" means, and shall be deemed to have occurred if, (a)
any Person or group of Persons (other than (i) Borrower, (ii) any Subsidiary of
Borrower, (iii) any employee or director benefit plan or stock plan of Borrower
(including the ESOP) or a Subsidiary of Borrower or any trustee or fiduciary
with respect to any such plan when acting in that capacity or any trust related
to any such plan) shall have acquired beneficial ownership of shares
representing more than Twenty-Five Percent (25%) of the combined voting power
represented by the outstanding voting shares of Borrower (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, and
the applicable rules and regulations thereunder), or (b) during any period of
twelve (12) consecutive months, commencing before or after the date of this
Agreement, individuals who on the first day of such period were directors of
Borrower (together with any replacement or additional directors who were
nominated or elected by a majority of directors then in office) cease to
constitute a majority of the Board of Directors of Borrower, or (c) Borrower
consolidates with or merges into another corporation or conveys, transfers or
leases all or substantially all of its property to any Person, or any
corporation consolidates with or merges into Borrower, in either event pursuant
to a transaction in which the outstanding Capital Stock of Borrower is
reclassified or changed into or exchanged for cash, securities or other
property.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and all regulations promulgated thereunder.
"Collateral Documents" means each Mortgage, and each Pledge and
Security Agreement, in substantially the form of Exhibit D hereto, duly executed
by Borrower and each domestic Subsidiary to the Agent for the benefit of the
Lenders to secure the Obligations, including any amendment or modification
thereof and any financing statements and any other collateral documents now or
hereafter executed by Borrower or a Guarantor to secure the Obligations.
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CREDIT AGREEMENT PAGE 3
"Commitment Fee" means the fee required to be paid by Borrower pursuant
to Section 2.6(a) hereof.
"Compliance Certificate" means a Compliance Certificate, in the form
attached hereto as Exhibit G, duly executed by the chief executive officer or
chief financial officer of Borrower.
"Consolidated Net Worth" means the excess of Borrower's consolidated
total assets over Borrower's Consolidated Total Liabilities, each determined in
accordance with GAAP and as shown on the balance sheets furnished to the Lenders
from time to time pursuant to Section 5.1(a) hereof.
"Consolidated Tangible Net Worth" means, on any date of determination,
the amount by which (a) Consolidated Net Worth exceeds (b) the sum of (i) all
assets which would be classified as intangible assets under GAAP, including
without limitation, goodwill (whether representing the excess of cost over book
value of assets acquired or otherwise), patents, trademarks, trade names,
copyrights, franchises, operating permits, unamortized debt discount and
expense, organization costs, and research and development costs, (ii) minority
interests in subsidiaries, (iii) cash set apart and held in a sinking or other
similar fund established for the purpose of redemption or other retirement of
Capital Stock, (iv) to the extent not otherwise deducted, reserves for
depreciation, depletion, obsolescence and/or amortization of properties and all
other reserves or appropriations of retained earnings which, in accordance with
GAAP, should be established in connection with the business conducted by
Borrower, and (v) any revaluation or other write-up in book value of assets
subsequent to the date hereof.
"Consolidated Total Liabilities" means the consolidated total
liabilities of Borrower and its Subsidiaries, determined in accordance with GAAP
and as shown in the Financial Statements.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBs"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental Laws.
"Contingent Obligation", as applied to any Person, means any
Contractual Obligation, contingent or otherwise, of that Person with respect to
any Indebtedness of another or other obligation or liability of another,
including, without limitation, any such Indebtedness, obligation or liability of
another directly or indirectly guaranteed, endorse (otherwise than for
collection or deposit in the ordinary course of business), co-made or discounted
or sold with recourse by that Person, or in respect of which that Person is
otherwise directly or indirectly liable, including Contractual Obligations
(contingent or otherwise) arising through or liability or any security therefor,
or to provide funds for the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make payment other than for value received.
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CREDIT AGREEMENT PAGE 4
"Contractual Obligation", as applied to any Person, means any provision
of any equity or debt securities issued by that Person or any indenture,
mortgage, deed of trust, security agreement, pledge agreement, guaranty,
contract, undertaking, agreement or instrument, in any case in writing, to which
that Person is a party or by which it or any of its properties is bound, or to
which it or any of its properties is subject.
"Default" means an event described in Article 7 hereof.
"Defaulting Lender" shall mean any Lender with respect to which a
Lender Default is in effect.
"EBITDAE" means, with respect to Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP, the sum of (a) Net
Income, plus (b) to the extent deducted in determining Net Income, income taxes
paid or accrued, plus (c) interest expense, plus (d) to the extent deducted in
determining Net Income, depreciation and amortization, plus to the extent
deducted in determining Net Income, ESOP Compensation, plus (e) to the extent
deducted in determining Net Income, the lesser of (i) the costs and expenses
incurred in connection with the Special Stock Redemption and the establishment
of the Facilities or (ii) One Million Five Hundred Thousand Dollars
($1,500,000), plus (f) to the extent deducted in determining Net Income,
non-cash expenses for stock compensation; in each instance determined for the
trailing four (4) quarter period ending on the date of determination.
"Eligible Transferees" means a commercial bank, financial institution
or other "accredited investor" (as defined in Regulation D of the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder).
"Employee Benefit Plans" shall have the meaning ascribed thereto in
Section 4.9 hereof.
"Environmental Laws" means all provisions of laws, statutes,
ordinances, rules, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and standards promulgated by any
Governmental Authority concerning the protection of, or regulation of the
discharge of substances into, the environment or concerning the health or safety
of persons with respect to environmental hazards, and includes, without
limitation, the Hazardous Materials Transportation Act, 42 U.S.C. Section 1801
et seq., the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of
1986, 42 U.S.C. Section Section 9601 et seq., Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act of 1976 and Solid and
Hazardous Waste Amendments of 1984, 42 U.S.C. Section Section 6901 et seq.,
Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977,
33 U.S.C. Section Section 1251 et seq., Clean Air Act of 1966, as amended, 42
U.S.C. Section Section 7401 et seq., Toxic Substances Control Act of 1976, 15
U.S.C. Section Section 2601 et seq., the Federal Insecticide, Fungicide, and
Rodenticide Act, 7 U.S.C. Section 7401 et seq., Occupational Safety and Health
Act of 1970, as amended, 29 U.S.C. Section Section 651 et seq., Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section Section
11001 et seq., National Environmental Policy Act of 1975, 42 U.S.C. Section
Section 4321 et seq., Safe Drinking Water Act of 1974, as amended, 42 U.S.C.
Section Section 300(f) et seq., and any similar or implementing state law, and
all amendments, rules, and regulations promulgated thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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CREDIT AGREEMENT PAGE 5
"ERISA Affiliate" means any trade or business, whether or not
incorporated, which together with Borrower would be treated as a single employer
under ERISA.
"ESOP" means the employee stock ownership plan and trust established
pursuant to the ESOP Plan.
"ESOP Compensation" means Borrower's compensation expense determined in
accordance with the American Institute of Certified Public Accountants Statement
of Position 93-6.
"ESOP Loan" means the Twenty Million Dollar ($20,000,000) loan from
Borrower to the ESOP to be used to acquire qualifying employer securities of
Borrower.
"ESOP Plan" means the Chromcraft Revington, Inc. Employee Stock
Ownership Plan adopted by Borrower effective January 1, 2002 and the Chromcraft
Revington, Inc. Employee Stock Ownership Trust effective January 1, 2002.
"Existing Credit Agreement" means the Credit Agreement dated as of
December 20, 2000 among Borrower, the banks party thereto and the Agent.
"Facilities" means the Revolving Commitment, the Swing Line Commitment,
the Term Loan, the Letters of Credit, and any other credit facility provided by
the Lenders from time to time pursuant to this Agreement.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the 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 for such day (or, if such day is not a
Banking Day, for the immediately preceding Banking Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Banking Day, the average of the quotations at approximately 10:00 A.M. (Chicago
time) on such day on such transactions received by the Agent from three (3)
Federal funds brokers of recognized standing selected by the Agent in its sole
discretion (rounded upward, if necessary, to the nearest 1/16%).
"Financial Statements" means, as the context may require, (a) the
consolidated balance sheets of Borrower and its Subsidiaries as of December 31,
2001 and their consolidated statements of income and retained earnings and
consolidated statement of cash flows for the periods then ended, and (b) the
consolidated financial statements of Borrower and its Subsidiaries furnished
from time to time pursuant to Section 5.1(a) hereof; in all cases, together with
any accompanying notes thereto, and any other documents or data furnished in
connection therewith.
"Fixed Charge Coverage Ratio" means, with respect to Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP, the
ratio of (a) the sum of (i) EBITDAE minus (ii) Capital Expenditures divided by
(b) the sum of (i) cash interest expense, plus (ii) scheduled payments of all
long term Indebtedness plus (iii) cash taxes; in each instance determined for
the trailing four (4) quarter period ending on the date of determination. The
Fixed Charge Coverage Ratio shall be determined in accordance with GAAP and as
shown in the Financial Statements.
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CREDIT AGREEMENT PAGE 6
"GAAP" means generally accepted accounting principles in the United
States of America in effect from time to time as promulgated by the Financial
Accounting Standards Board and recognized and interpreted by the American
Institute of Certified Public Accountants.
"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, including, without limiting the generality of the foregoing, any
agency, body, commission, court or department thereof, whether federal, state,
local or foreign.
"Guarantors" means, jointly and severally, Chromcraft Corporation,
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Corporation, Silver Furniture Co., Inc., Silver Furniture
Manufacturing Co., Inc., CRI Capital Corporation, Korn Industries, Incorporated,
CRI Corporation-Sumter, Cochrane Furniture Company, Inc., CRI Realty Company,
LLC and any other Subsidiaries of Borrower created or acquired from time to time
after the date hereof.
"Guaranty" means the Subsidiary Guaranty, in substantially the form of
Exhibit F hereto, duly executed by each of the Guarantors to the Lenders in
connection with the "Obligations, including any modification or replacement
thereof.
"Hedging Obligations" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including, but to limited to, dollar-endorsement or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (b) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Indebtedness" of any Person means, without duplication, such Person's
(a) obligations for borrowed money, (b) obligations representing the deferred
purchase price of property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), (c) obligations, whether or not assumed, secured by Liens or payable out
of the proceeds or products from property or assets now or hereafter owned or
acquired by such Person, (d) obligations which are evidenced by notes,
acceptances or other instruments, (e) Capitalized Lease Obligations, (f)
Contingent Obligations, (g) obligations with respect to letters of credit and
(h) Hedging Obligations. The amount of Indebtedness of any Person at any date
shall be without duplication (i) the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability of any
such Contingent Obligations at such date and (ii) in the case of Indebtedness of
others secured by a Lien to which the property or assets owned or held by such
Person is subject, the lesser of the fair market value at such date of any asset
subject to a Lien securing the Indebtedness of others and the amount of the
Indebtedness secured.
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CREDIT AGREEMENT PAGE 7
"LC Issuer" means National City (or any subsidiary or affiliate of
National City designated by National City which has a credit rating not less
National City's credit rating) in its capacity as issuer of the Letters of
Credit hereunder.
"Lender" means the lending institutions listed on Schedule I hereto,
their successors and assigns, as well as any Person which becomes a "Lender"
hereunder pursuant to Section 11.3 hereof.
"Lender Default" shall mean (a) the refusal (which has not been
retracted) of a Lender to make available its portion of any borrowing hereunder
or (b) a Lender having notified in writing Borrower and/or the Agent that it
does not intend to comply with its obligations under Article 2 hereof, in the
case of either clause (a) or (b) as a result of any takeover of such Lender by
any regulatory authority or agency.
"Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on the signature pages hereof or on a Schedule or otherwise selected by such
Lender or the Agent pursuant to Section 2.13 hereof.
"Letters of Credit" means standby and commercial letters of credit, now
or hereafter issued by the LC Issuer, from time to time, at the request of, and
for the account of, Borrower and issued on behalf of Borrower or a Guarantor
pursuant to Section 2.9 hereof.
"Letter of Credit Applications" means, collectively, each Application
for Standby Letter of Credit and each Application and Agreement for Irrevocable
Letter of Credit, in the forms prescribed by the LC Issuer, duly executed by
Borrower in favor of the LC Issuer, from time to time, to govern a Letter of
Credit, as any of the same may be amended from time to time.
"Leverage Ratio" means, with respect to Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP, the ratio of (a) all
interest-bearing Indebtedness (including Capitalized Lease Obligations), divided
by (b) EBITDAE. The Leverage Ratio shall be determined in accordance with GAAP
and as shown in the Financial Statements.
"LIBOR" means, with respect to each LIBOR Advance for the relevant
LIBOR Interest Period, the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars appearing on Reuters Screen FRBD as
of 11:00 a.m. (London time) two (2) Banking Days prior to the first day of such
LIBOR Interest Period, and having a maturity equal to such LIBOR Interest
Period, provided that, (a) if Reuters Screen FRBD is not available to the Agent
for any reason, the applicable LIBOR for the relevant LIBOR Interest Period
shall instead be the applicable British Bankers' Association Interest Settlement
Rate for deposits in U.S. dollars as reported by any other generally recognized
financial information service as of 11:00 a.m. (London time) two (2) Banking
Days prior to the first day of such LIBOR Interest Period, and (b) if no such
British Bankers' Association Interest Settlement Rate is available to the Agent,
the applicable LIBOR for the relevant LIBOR Interest Period shall instead be the
rate determined by the Agent to be the rate at which National City or one of its
affiliate banks offers to place deposits in U.S. dollars with first-class
lenders in the London interbank market at approximately 11:00 a.m. (London time)
two (2) Banking Days prior to the first day of such LIBOR Interest Period, in
the appropriate amount of National City's relevant LIBOR Advance and having a
maturity approximately equal to such LIBOR Interest Period.
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CREDIT AGREEMENT PAGE 8
"LIBOR Interest Period" means, with respect to a LIBOR Advance, a
period of one (1), two (2), three (3) or six (6) months commencing on a Banking
Day selected by Borrower pursuant to this Agreement. Such LIBOR Interest Period
shall end on the day which corresponds numerically to such date one (1), two
(2), three (3) or six (6) months thereafter, provided, however, that if there is
no such numerically corresponding day in such next, second (2nd), third (3rd) or
sixth (6th) succeeding month, such LIBOR Interest Period shall end on the last
Banking Day of such next, second (2nd), third (3rd) or sixth (6th) succeeding
month. If a LIBOR Interest Period would otherwise end on a day which is not a
Banking Day, such LIBOR Interest Period shall end on the next succeeding Banking
Day, provided, however, that if said next succeeding Banking Day falls in a new
calendar month, such LIBOR Interest Period shall end on the immediately
preceding Banking Day.
"LIBOR Loans" means any Loan when and to the extent that the interest
rate thereof is determined by reference to the Adjusted LIBOR.
"LIBOR Optional Rate" means a rate selected by Borrower to be
calculated by reference to the Adjusted LIBOR.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan Documents" means this Agreement, the Notes, the Collateral
Documents, the Guaranty, any Letter of Credit Applications, and any other
documents or instruments now or hereafter executed and delivered by or on behalf
of Borrower to any Lender or the Agent to evidence, govern or secure the
Obligations.
"Loans" means, with respect to a Lender, such Lender's loan made
pursuant to Article 2 (or any conversion or continuation thereof).
"Mandatory Funding" shall have the meaning ascribed thereto in Section
2.1(b) hereof.
"Material Adverse Effect" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of Borrower, or Borrower and its Subsidiaries, taken as
a whole, (b) the ability of Borrower or any of its Subsidiaries to perform their
respective obligations under the Loan Documents in any material respect, or (c)
the ability of the Lenders or the Agent to enforce in any material respect the
Obligations.
"Mortgages" means each Real Estate Mortgage, Security Agreement and
Fixture Filing, in substantially the form of Exhibit E-1 hereto, and each Deed
of Trust, Assignment of Rents, Security Agreement and Fixture Filing, in
substantially the form of Exhibit E-2 hereto, duly executed by the applicable
owner of the Real Estate to the Agent to secure the Obligations, including any
amendment or modification hereof.
"National City" means National City Bank of Indiana, a national banking
association, having its principal offices in Indianapolis, Indiana, in its
individual capacity.
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CREDIT AGREEMENT PAGE 9
"Net Income" means, for any period, the consolidated net income of
Borrower after deductions for income taxes, determined in accordance with GAAP
and as shown in the Financial Statements.
"Notes" means, collectively, the Revolving Notes, the Term Notes and
the Swing Line Note.
"Obligations" means all of the unpaid principal amount of, and accrued
interest on, the Notes, actual and contingent reimbursement obligations under
the Letters of Credit, all commitment fees, Agent fees, Letter of Credit fees,
all other obligations and liabilities of Borrower to the Lenders or to any
Lender or to the Agent in connection with the Facilities of every type and
description, direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, or otherwise arising under the Loan Documents
whether or not contemplated by Borrower or the Lenders as of the date hereof,
including, without limitation, all reasonable costs of collection and
enforcement of any and all thereof, including reasonable attorneys' fees.
"Offering Letter" means that certain letter issued by National City to
the Lenders dated March 8, 2002, and acknowledged by Borrower as of March 8,
2002.
"Participants" shall have the meaning ascribed thereto in Section
11.2(a) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to ERISA, or any successor entity.
"Permissible Increment" means a minimum principal amount of Five
Hundred Thousand Dollars ($500,000) and minimum increments of One Hundred
Thousand Dollars ($100,000) above Five Hundred Thousand Dollars ($500,000).
"Permitted Encumbrances" means (a) Liens for taxes or assessments which
are not yet due, Liens for taxes or assessments or Liens of judgments which are
being contested, appealed or reviewed in good faith by appropriate proceedings
which prevent foreclosure of any such Lien or levy of execution thereunder and
against which Liens, if any, adequate insurance or reserves have been provided;
(b) pledges or deposits to secure payment of workers' compensation obligations
and deposits or indemnities to secure public or statutory obligations or for
similar purposes; (c) any Liens in favor of the Lenders and/or the Agent under
the Loan Documents; (d) Liens imposed by law, such as carrier's, warehousemen's
and mechanics' liens and other similar Liens arising in the ordinary course of
business which secure payment of obligations not more than sixty (60) days past
due; (e) utility easements, building restrictions, zoning ordinances and such
other encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not in
any material way affect the marketability of the same or interfere with the use
thereof in the business of a Person; (f) lessors' interests under Capitalized
Leases; (g) Liens encumbering only assets not constituting current assets and
securing Indebtedness of Borrower and its Subsidiaries not exceeding in the
aggregate Ten Percent (10%) of Borrower's Consolidated Tangible Net Worth at any
one time outstanding; (h) Liens in favor of the Agent for the benefit of the
Lenders; (i) permitted liens and encumbrances described in the Mortgages; and
(j) those further encumbrances (if any) shown on Schedule II hereto.
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CREDIT AGREEMENT PAGE 10
"Person" means and includes an individual, a partnership, a joint
venture, a corporation, a limited liability company, a trust, an unincorporated
organization and a Governmental Authority.
"Prime Rate" means the variable per annum rate of interest established
and quoted by Agent from time to time as its "prime rate," as adjusted on the
effective date of each change in such established and quoted rate, provided that
such prime rate shall not necessarily be representative of the rate of interest
actually charged by Agent on any loan or class of loans.
"Pro Rata Share" means, for any Lender, when used with reference to an
aggregate or total amount, an amount equal to the product of (a) such aggregate
or total amount, times (b) a fraction, the numerator of which shall be such
Lender's Revolving Commitment (or, if the Revolving Commitments have been
terminated, the sum of such Lender's outstanding Revolving Loans and share of
the face amount of outstanding Letters of Credit) plus such Lender's outstanding
Term Loans and the denominator of which shall be the sum of the aggregate
Revolving Commitments (or, if the Revolving Commitments have been terminated,
the sum of the aggregate outstanding Revolving Loans and the aggregate face
amount of outstanding Letters of Credit) plus the total outstanding Term Loan
Advances.
"Purchasers" shall have the meaning ascribed thereto in Section 11.3(a)
hereof.
"Qualified Investments" means (a) short term obligations of, or fully
guaranteed by, the United States of America, (b) commercial paper rated A-1 or
better by Standard & Poor's Corporation or P-1 or better by ▇▇▇▇▇'▇ Investors
Service, Inc., (c) demand deposit accounts maintained in the ordinary course of
business, and (d) certificates of deposit issued by commercial Lenders having
capital and surplus in excess of One Hundred Million Dollars ($100,000,000).
"Real Estate" means, collectively, the real estate generally described
on Schedule III hereto, as more particularly described in the applicable
Mortgage.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including the movement of Contaminants
through or in the air, soil, surface water or groundwater.
"Replaced Lender" shall have the meaning ascribed thereto in Section
12.23 hereof.
"Replacement Lender" shall have the meaning ascribed thereto in Section
12.23 hereof.
"Repurchase Documents" means, collectively, the Stock Purchase
Agreement among Borrower and Court Square Capital Limited dated February 19,
2002 and the Stock Purchase Agreement among the ESOP and GreatBanc Trust Company
dated February 19, 2002, and all documents and instruments executed pursuant to
or in connection with the Special Stock Redemption.
"Required Lenders" means Lenders in the aggregate holding directly or
indirectly through participation with respect to the Letters of Credit at least
Sixty-Six and Two-Thirds Percent (66-2/3%) of the sum of (a) the unpaid
principal amount of the Loans, plus (b) the outstanding face amount of all
Letters of Credit; or, if no Loans, or Letters of Credit are outstanding,
Lenders in the aggregate having at least Sixty-Six and Two-Thirds Percent
(66-2/3%) of the aggregate Revolving Commitments.
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CREDIT AGREEMENT PAGE 11
"Reserve Requirement" means, for any LIBOR Loan for any LIBOR Interest
Period therefor, the daily average of the stated maximum rate (expressed as a
decimal) at which reserves, including any marginal, supplemental, or emergency
reserves, are required to be maintained during such LIBOR Interest Period under
Regulation D by member Lenders of the Federal Reserve System against
"Eurocurrency liabilities" (as such term is used in Regulation D), but without
benefit or credit of proration, exemptions, or offsets that might otherwise be
available from time to time under Regulation D. Without limiting the effect of
the foregoing, the Reserve Requirement shall reflect any other reserves required
to be maintained by the Lenders against any category of liabilities that
includes deposits by reference to which the Adjusted LIBOR is to be determined
or any category or extension of credit or other assets that includes LIBOR
Loans.
"Revolving Commitments" means, for each Lender, the amount set forth
opposite such Lender's name on Schedule I hereto directly below the column
entitled "Revolving Commitment."
"Revolving Commitment Period" means the period from the date hereof
until March 13, 2007.
"Revolving Loans" means the loans made by the Lenders to Borrower under
Article 2 hereof pursuant to their respective Revolving Commitments, including
any extensions or renewals thereof.
"Revolving Notes" means the Credit Notes, each substantially in the
form of Exhibit A hereto, duly executed by Borrower to the respective Lenders to
evidence the Revolving Loans, including any and all renewals, extensions,
replacements and modifications thereof.
"Solvent" means, when used with respect to any Person, that at the time
of determination:
(a) the fair value of its assets (both at fair valuation and at
present fair saleable value) is equal to or in excess of the total
amount of its liabilities, including, without limitation, contingent
liabilities; and
(b) it is then able and expects to be able to pay its debts as
they mature; and
(c) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
With respect to contingent liabilities (such as litigation, guarantees
and pension plan liabilities), such liabilities shall be computed at the amount
which, in light of all the facts and circumstances existing at the time,
represent the amount which can be reasonably be expected to become an actual or
mature liability.
"Special Stock Redemption" means Borrower's stock redemption of
3,695,418 shares owned by Court Square Capital Limited and the ESOP's purchase
of 2,000,000 shares of Borrower's stock owned by Court Square Capital Limited,
all pursuant to the Repurchase Documents.
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CREDIT AGREEMENT PAGE 12
"Subordinated Debt" means any Indebtedness of Borrower that is
subordinated to the full, final and irrevocable payment of the Obligations in
form and substance acceptable to the Required Lenders.
"Subsidiary" of a Person means (a) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(b) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of Borrower.
"Substantial Portion" means, with respect to property of Borrower and
its Subsidiaries, property which represents more than ten percent (10%) of the
consolidated total assets of Borrower and its Subsidiaries, determined in
accordance with GAAP and as shown in the Financial Statements as at the end of
the most recently completed fiscal quarter.
"Swing Line Bank" means National City or any other Lender as a
successor Swing Line Bank.
"Swing Line Commitment" means the obligation of the Swing Line Bank to
make Swing Line Loans up to a maximum principal amount of Five Million Dollars
($5,000,000) at any one time outstanding.
"Swing Line Loan" means a Loan made available to Borrower by the Swing
Line Bank pursuant to Section 2.1(b) hereof.
"Swing Line Note" means a promissory note, in substantially the form of
Exhibit C hereto, duly executed by Borrower and payable to the order of the
Swing Line Bank in the amount of its Swing Line Commitment, including any
amendment, restatement, modification, renewal or replacement of such Swing Line
Note.
"Target" shall have the meaning ascribed thereto in Section 6.3(a)
hereof.
"Term Loan Commitments" means, for each Lender, the amount set forth
opposite such Lender's name on Schedule I hereto directly below the column
entitled "Term Loan Commitment."
"Term Loans" means the loans made by the Lenders to Borrower under
Article 2 hereof pursuant to their respective Term Loan Commitments, including
any extensions or renewals thereof.
"Term Notes" means the Term Notes, each substantially in the form of
Exhibit B hereto, duly executed by Borrower to the respective Lenders to
evidence the Term Loans, including any and all renewals, extensions,
replacements and modifications thereof.
"Transferee" shall have the meaning ascribed in Section 11.4 hereof.
"Unmatured Default" means any event which with notice, or lapse of time
or both, would constitute a Default.
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CREDIT AGREEMENT PAGE 13
Section 1.2 Rules of Construction. The foregoing definitions shall be equally
applicable to both the singular and plural forms of the defined terms. Use of
the terms "herein" "hereof", and "hereunder" shall be deemed references to this
Agreement in its entirety and not to the Section clause in which such term
appears.
Section 1.3 Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP consistent with those applied
in the preparation of the Financial Statements.
ARTICLE 2.
Section 2.1 Commitments.
(a) Revolving Commitment. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Revolving Loans to Borrower
from time to time during the Revolving Commitment Period in a principal
amount not in excess of the unborrowed portion of such Lender's Revolving
Commitment on the borrowing date. No requested Revolving Loan Advance shall
cause the aggregate outstanding balance of the Revolving Loan Advances plus
the face amounts of outstanding Letters of Credit and unreimbursed drawings
thereunder plus the aggregate outstanding principal balance of the Swing
Line Loans to exceed the aggregate Revolving Commitments. During the
Revolving Commitment Period, Borrower may use the Revolving Commitments by
borrowing, prepaying the Revolving Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. The
Revolving Loans made by the Lenders pursuant hereto shall be evidenced by
the Revolving Notes.
(b) Swing Line Loans/Mandatory Funding. Subject to the terms and
conditions of this Agreement, the Swing Line Bank agrees to make swing line
loans to Borrower from time to time in an amount not to exceed the lesser
of (i) the unborrowed portion of its Revolving Commitment or (ii) the Swing
Line Commitment. No requested Swing Line Loan shall cause the aggregate
outstanding principal balance of Swing Line Loans plus the aggregate
outstanding principal balance of the Revolving Loan Advances plus the face
amount of outstanding Letters of Credit and unreimbursed drawings
thereunder to exceed the aggregate Revolving Commitments. During the
Revolving Commitment Period, Borrower may borrow, prepay and reborrow such
available amount under the Swing Line Commitment from time to time, all in
accordance with the terms and conditions hereof. The Swing Line Loans shall
be evidenced by the Swing Line Note. On any Banking Day, the Swing Line
Bank may, in its sole discretion, give notice to the Lenders that the
outstanding principal balance of the Swing Line Loans shall be funded with
an Advance under the Revolving Loans (provided that such notice shall be
deemed to have been automatically given upon the occurrence of a Default
under Article 7(f) or Article 7(g) hereof), in which case an Advance under
the Revolving Loans (each such Advance being referred to herein as a
"Mandatory Funding") shall be made on the immediately succeeding Banking
Day by all Lenders with a Revolving Loan pro rata based on each such
Lender's Revolving Commitment, and the proceeds thereof shall be applied
directly to the Swing Line Bank to repay such outstanding Swing Line Loans.
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CREDIT AGREEMENT PAGE 14
Each Lender with a Revolving Commitment hereby irrevocably agrees to make
such Revolving Loans pursuant to each Mandatory Funding in the amount and
in the manner specified in the preceding sentence and on the date specified
to it by the Swing Line Bank notwithstanding: (A) that the amount of the
Mandatory Funding may not comply with the minimum amount for a borrowing
specified in Section 2.4(a) hereof; (B) whether any conditions specified in
Article 6 hereof are then satisfied; (C) the date of such Mandatory
Funding; and (D) any reduction in the total Revolving Commitment after any
such Swing Line Loans were made. In the event that any Mandatory Funding
cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code in respect of Borrower), each Lender
with a Revolving Commitment hereby agrees that it shall forthwith purchase
from the Swing Line Bank (without recourse or warranty) such assignment of
the outstanding Swing Line Loans as shall be necessary to cause such
Lenders to share in such Swing Line Loans ratably based upon their
respective Revolving Commitment, provided that all interest payable on such
Swing Line Loans shall be for the account of the Swing Line Bank until the
date the respective assignment is purchased and, to the extent attributable
to the purchased assignment, shall be payable to the Lender purchasing same
from and after such date of purchase.
(c) Term Loan Commitment. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make its Term Loan to Borrower
in the amount of its Term Loan Commitment. The Term Loans shall be made by
the Lenders ratably pursuant to their respective Term Loan Commitments and
shall be evidenced by the Term Notes.
Section 2.2 Interest.
(a) Revolving Commitment. Prior to maturity or Default, the principal
amount of the Revolving Loans outstanding from time to time shall bear
interest at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin, except that at the option of Borrower, exercised as
provided in Section 2.5 hereof, interest may accrue prior to maturity on
any Permissible Increment of outstanding Advances of the Revolving Loans at
a per annum rate equal to the Adjusted LIBOR plus the Applicable Margin. At
the expiration of each LIBOR Interest Period on such Permissible Increment,
unless, in each case, Borrower selects a LIBOR Optional Rate as provided in
Section 2.5 hereof, interest on such Permissible Increment shall again
accrue at the Alternate Base Rate plus the Applicable Margin.
(b) Swing Line Loans. Prior to maturity or Default, outstanding Swing
Line Loans from time to time shall bear interest at a rate per annum equal
to the Alternate Base Rate plus the Applicable Margin, except that at the
option of Borrower, communicated by telephone or by telex, facsimile
machine or other form of written or electronic communication delivered to
the Swing Line Bank, interest may accrue prior to maturity in minimum
principal increments of One Hundred Thousand Dollars ($100,000) of
outstanding Swing Line Loans for a period until otherwise notified by
Borrower at a per annum rate equal to the Applicable Margin plus the
Adjusted LIBOR having a LIBOR Interest Period of one (1) month as
determined by the Swing Line Bank;
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CREDIT AGREEMENT PAGE 15
provided, that such Adjusted LIBOR shall be re-priced on each Banking Day
during such period. The Swing Line Loans may also accrue interest at such
interest rate as Borrower and the Swing Line Bank mutually agree to in
writing.
(c) Term Loan. Prior to maturity or Default, the principal amount of
the Term Loan outstanding from time to time shall bear interest at a rate
per annum equal to the Alternate Base Rate plus the Applicable Margin,
except that at the option of Borrower, exercised as provided in Section 2.5
hereof, interest may accrue prior to maturity on any Permissible Increment
of outstanding Advances of the Term Loan at a per annum rate equal to the
Adjusted LIBOR plus the Applicable Margin. At the expiration of each LIBOR
Interest Period on such Permissible Increment, unless, in each case,
Borrower selects a LIBOR Optional Rate as provided in Section 2.5 hereof,
interest on such Permissible Increment shall again accrue at the Alternate
Base Rate plus the Applicable Margin.
(d) General. Interest shall be due and payable for the exact number of
days principal is outstanding and shall be calculated on the basis of a
three hundred sixty (360) day year. Any change in the interest rates
occasioned by a change in the Alternate Base Rate shall be effective on the
same day as the change in the Alternate Base Rate.
Section 2.3 Payments of Principal and Interest.
(a) Revolving Commitment. Interest only on the outstanding Advances of
the Revolving Loans from time to time shall be due and payable throughout
the term of the Revolving Commitment (i) on the last day of each calendar
month with respect to each Alternate Base Rate Loan, and (ii) on the last
day of an applicable LIBOR Interest Period with respect to each LIBOR Loan
and, in the case of a LIBOR Interest Period greater than three (3) months,
at three (3) month intervals after the first day of such LIBOR Interest
Period. Unless the Revolving Commitments are extended by the Lenders in
their sole discretion, the entire principal balance of the Revolving Loans,
together with all accrued and unpaid interest thereon, and all fees and
charges payable in connection therewith, shall be due and payable on March
13, 2007.
(b) Swing Line Loans. Interest only on the outstanding balance of the
Swing Line Loans from time to time shall be due and payable on the last day
of each month. From time to time, Borrower shall make principal payments in
respect of the Swing Line Loans in an amount sufficient so that the
outstanding principal balance of the Swing Line Loans plus the outstanding
balance of the Revolving Loans plus the face amounts of outstanding Letters
of Credit and unreimbursed drawings thereunder does not exceed the
aggregate Revolving Commitment. Unless the Swing Line Commitment is
extended by the Swing Line Bank, the entire principal balance of the Swing
Line Loans, together with all accrued and unpaid interest thereon, and all
fees and charges payable in connection therewith, shall be due and payable
on March 13, 2007.
(c) Term Loan. Interest on the outstanding Term Loan Advances from
time to time shall be due and payable throughout the term of the Term Loan
(a) on the last day of each calendar month with respect to each Alternate
Base Rate Loan, and (b) on the last day of an applicable LIBOR Interest
Period with respect to each LIBOR Loan and, in the
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CREDIT AGREEMENT PAGE 16
case of a LIBOR Interest Period greater than three (3) months, at three (3)
month intervals after the first day of such LIBOR Interest Period.
Commencing on June 30, 2002, and continuing on the last day of each
September, December, March and June thereafter, Borrower shall pay, in
addition to any required payments of interest, quarterly installments of
principal in an amount equal to One Million Two Hundred Fifty Thousand
Dollars ($1,250,000). Any outstanding Term Loan Advances and all accrued
and unpaid interest thereon and all fees and charges in connection
therewith, shall be due and payable on March 13, 2007.
(d) Mandatory Prepayments and Reductions. In addition to the principal payments
required pursuant to Section 2.3(a), (b) and (c), and without limiting the
other provisions of the Loan Documents, Borrower shall make the following
additional principal payments to be applied as mandatory prepayments:
(i) Upon Borrower's receipt of the proceeds from the issuance of
any debt or from any equity offerings (whether private or public)
which adds to Stockholder's equity as shown in the Financial
Statements, Borrower shall make a principal payment in respect of the
Term Loans in an amount equal to (A) One Hundred Percent (100%) of
such debt proceeds, and (B) Fifty Percent (50%) of such equity
proceeds.
(ii) Within 180 days after Borrower's or a Subsidiary's receipt
of the proceeds (net of any tax liability and net of reasonable
expenses incurred in connection therewith) in excess of One Million
Dollars ($1,000,000) from the disposition of any assets sold other
than in the ordinary course of business, Borrower shall make a
principal payment in respect of the Term Loans in the amount of such
proceeds to the extent such proceeds have not been reinvested into
replacement assets.
(iii) Within 180 days after Borrower's or a Subsidiary's receipt
of the proceeds (net of any tax liability and net of reasonable
expenses incurred in connection therewith) in excess of One Million
Dollars ($1,000,000) from any insurance, condemnation award,
litigation award or settlement or other compensation arising from any
loss of or damage to, or any condemnation or other taking of, any
property of Borrower or its Subsidiaries, Borrower shall make a
principal payment in respect of the Term Loans in the amount of such
proceeds to the extent such proceeds have not been used within 180
days to replace or repair the subject property lost, damaged or taken.
All such mandatory prepayments shall be applied ratably among the
Lenders to reduce the outstanding Term Loan Advances. After the Term
Loans have been paid in full, then the amount of such mandatory
prepayment, to the extent it exceeds the aggregate amount to be
applied to the Term Loans, shall be applied ratably among the Lenders
to reduce the outstanding Advances under the Revolving Loans and such
amount such ratably permanently reduce the Revolving Commitments.
Partial prepayments of the Term Loans pursuant to this Section shall
be applied against installments of principal in the inverse order of
their maturity and shall not otherwise affect the next regularly
scheduled principal payments due thereunder.
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CREDIT AGREEMENT PAGE 17
(e) Optional Prepayments. Subject to Section 2.5(g) hereof with
respect to LIBOR Advances, Borrower may from time to time, upon one (1)
Business Day notice to the Agent, without penalty or premium, prepay in
full all outstanding Advances constituting Alternate Base Rate Advances
and, if paid on the last day of the applicable LIBOR Interest Period, LIBOR
Advances. Subject to Section 2.5(g) hereof with respect to LIBOR Advances,
Borrower may from time to time, upon one (1) Business Day notice to the
Agent, without penalty or premium, prepay in partial prepayment in a
minimum aggregate amount of Permissible Increments, any portion of the
outstanding Advances constituting Alternate Base Rate Advances or, if paid
on the last day of the applicable LIBOR Interest Period, LIBOR Advances.
LIBOR Advances may only be prepaid on the expiration of a LIBOR Interest
Period applicable thereto. Partial prepayments of Term Loan Advances shall
be applied against regular quarterly installments of principal in the
inverse order of their maturity and shall not otherwise affect the next
regularly scheduled principal payment due thereunder. Amounts prepaid under
the Term Loan Advances may not be reborrowed.
(f) Method of Payment. All payments of principal and interest
hereunder shall be made by Borrower to the Agent at its address specified
in Section 12.11 hereof by 12:00 Noon (Cleveland, Ohio time) on the date
when due, and shall be applied pro rata among the Lenders in accordance
with the outstanding principal amounts of the Facilities held by them. Each
payment delivered to the Agent for the account of any Lender shall be
delivered by the Agent for the account of any Lender no later than 2:00
p.m. (Cleveland, Ohio time) on the same day. After notice to Borrower, the
Agent is authorized to charge the account of Borrower maintained with
National City for each payment of principal, interest and fees as it
becomes due hereunder.
(g) Banking Day. If any installment of principal or interest provided
herein becomes due and payable on a date other than a Banking Day, the
maturity of the installment of principal or interest shall be extended to
the next succeeding Banking Day, and interest shall be payable during such
extension of maturity.
Section 2.4 Method of Advance.
(a) Revolving Commitment. As Borrower desires to obtain Revolving
Loans hereunder, Borrower shall give the Agent notice of Borrower's
intention to borrow pursuant to the Revolving Commitments by not later than
12:00 p.m. (Cleveland, Ohio time), on the proposed Banking Day of
borrowing, subject to Section 2.5 hereof with respect to LIBOR Optional
Rate Advances and subject to compliance with Section 6.3 hereof. Each
request once received by the Agent shall be irrevocable, subject to Section
2.5(g) hereof. Such notice may be made orally by an Authorized Officer, or
upon a request transmitted to the Agent by telex, facsimile machine or
other form of written electronic communication and signed by an Authorized
Officer. The Agent may rely, without further inquiry, on all such requests
which shall have been received by it in good faith by anyone reasonably
believed to be an Authorized Officer. The Agent may require telephonic or
other oral requests to be followed immediately by a written request. Each
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CREDIT AGREEMENT PAGE 18
request shall in and of itself constitute a representation and warranty on
behalf of Borrower that no Default or Unmatured Default has occurred and is
continuing or would result from the making of the requested Advance and
that the requested Advance shall not cause the principal balance of the
Revolving Loans to exceed the aggregate Revolving Commitments. The Agent
shall notify the Lenders of Borrower's intent to borrow by 2:00 p.m.
(Cleveland, Ohio time) on the proposed Banking Day of borrowing. Subject to
the limitations of Section 2.1 hereof, the principal amount of each
Revolving Loan made by each Lender shall be that portion of the aggregate
loans made that the Revolving Commitment of such Lender bears to the
aggregate of the Revolving Commitments of the Lenders. By 3:00 p.m.
(Cleveland, Ohio time) on each such borrowing date, each Lender severally
agrees to make its portion of the Revolving Loan then being made to
Borrower by making available to the Agent, either by wire transfer to the
Agent's main office in Indianapolis, Indiana, or by deposit to any
correspondent account which Agent may maintain with that Lender, the amount
to be advanced by such Lender. Borrower hereby authorizes the disbursement
of each such Revolving Loan (other than Revolving Loans made by payment of
Letters of Credit and other than Mandatory Fundings) by deposit to the
account of Borrower with National City, and National City, as Agent, shall,
by 3:30 p.m. (Cleveland, Ohio time) on the date received, credit the amount
so received from each Lender to the account of Borrower with National City.
The aggregate principal amount of Revolving Loans (other than Revolving
Loans made by payment of Letters of Credit and other than Mandatory
Fundings) made on any borrowing date shall be a minimum of Five Hundred
Thousand Dollars ($500,000) and in integral multiples of One Hundred
Thousand Dollars ($100,000). Notwithstanding the foregoing, Mandatory
Fundings under the Revolving Loans shall be made in accordance with Section
2.1(b) hereof with respect to repayment of Swing Line Loans.
(b) Swing Line Loans. As Borrower desires to obtain Swing Line Loans
hereunder, Borrower shall give the Agent and the Swing Line Bank notice
thereof by not later than Noon (Cleveland, Ohio time), on the proposed
Banking Day of borrowing. Each request once received by the Swing Line Bank
shall be irrevocable. Such notice may be made orally by an Authorized
Officer, or upon a request transmitted to the Agent and Swing Line Bank by
telex, facsimile machine or other form of written electronic communication
and signed by an Authorized Officer. The Agent and the Swing Line Bank may
rely, without further inquiry, on all such requests which shall have been
received by it in good faith by anyone reasonably believed to be an
Authorized Officer. The Swing Line Bank may require telephonic or other
oral requests to be followed immediately by a written request. Each request
shall in and of itself constitute a representation and warranty on behalf
of Borrower that no Default or Unmatured Default has occurred and is
continuing or would result from the making of the requested Advance. No
requested Advance shall cause the principal balance of the Swing Line Loans
to exceed the Swing Line Commitment. Subject to borrowing availability, by
2:00 p.m. (Cleveland, Ohio time) on each such borrowing date, the Swing
Line Bank agrees to make its Swing Line Loan to Borrower by deposit to the
account of Borrower with National City. The aggregate principal amount of
the Swing Line Loans made on any
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CREDIT AGREEMENT PAGE 19
borrowing date shall be a minimum of One Hundred Thousand Dollars
($100,000) and in integral multiples of One Hundred Thousand Dollars
($100,000).
(c) Term Loan. The principal amount of the Term Loan made by each
Lender shall be that portion of the aggregate Term Loan made that the Term
Loan Commitment of such Lender bears to the aggregate of the Term Loan
Commitment of the Lenders.
(d) General. All Advances by the Lenders and payments by Borrower
shall be recorded by the Lenders on their books and records, and the
principal amount outstanding from time to time, plus interest payable
thereon shall be determined from the books and records of the Lenders. The
books and records of the Lenders shall be presumed prima facie correct as
to such matters.
Section 2.5 Procedures for Electing LIBOR Optional Rates. LIBOR Optional
Rates may be elected only in accordance with the following procedures and
subject to the other conditions contained in this Agreement:
(a) Unless the Required Lenders otherwise agree, no LIBOR Optional
Rate may be elected at any time a Default exists and unless the Agent
otherwise agrees, no LIBOR Optional Rate may be elected at any time an
Unmatured Default exists.
(b) Borrower shall notify the Agent of its election or renewal of an
LIBOR Optional Rate prior to 11:00 a.m. (Cleveland, Ohio time) not less
than three (3) Banking Days prior to the commencement of a LIBOR Interest
Period with respect to LIBOR Loans, specifying (i) the election or renewal
date, (ii) the amount of the Loan (or Loans taken together) elected or
renewed which amount shall be in a Permissible Increment, and (iii) the
duration of the LIBOR Interest Period selected to apply thereto. The Agent
shall immediately notify the Lenders whenever a LIBOR Optional Rate is
selected by Borrower.
(c) An election of a LIBOR Optional Rate may be communicated by
telephone or by telex, facsimile machine or other form of written
electronic communication, or by a writing delivered to the Agent. Borrower
shall confirm in writing any election communicated by telephone. The Agent
shall be entitled to rely on any verbal communication of the election of a
LIBOR Optional Rate which is received by a designated employee of the Agent
from anyone reasonably believed in good faith by such employee to be
authorized.
(d) Not more than a total of Four (4) LIBOR Optional Rate Advances and
Alternative Base Rate Advances may be outstanding at any one time.
(e) Notwithstanding any other provision of this Agreement, in the
event that the Agent determines (which determination if made in good faith
shall be conclusive and binding upon Borrower) that by reason of
circumstances affecting the London interbank market, adequate and
reasonable means do not exist for ascertaining the LIBOR for any LIBOR
Interest Period at a time when LIBOR Loans are outstanding, or quotations
of interest rate for the relevant deposits referred to in definition of the
Adjusted LIBOR are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining the rate of interest on a
LIBOR Loan as provided herein, or if the Required
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CREDIT AGREEMENT PAGE 20
Lenders determine (which determination if made in good faith shall be
conclusive) that the relevant rates of interest referred to in the
definition of the Adjusted LIBOR upon the basis of which the rate of
interest for any such type of Loan is to be determined, to not accurately
cover the cost to the Lenders of making or maintaining such types of Loans,
the Agent shall forthwith give notice of such determination, confirmed in
writing, to Borrower. If such notice is given, (i) the obligation of the
Lenders to make LIBOR Loans shall be suspended until the Agent notifies
Borrower that the circumstances giving rise to such suspension no longer
exists, and (ii) the then outstanding principal amount of each LIBOR Loan
shall be converted, on the last day of the then current LIBOR Interest
Period applicable to such Loan, to an Alternate Base Rate Loan.
(f) If any law or any governmental regulation, guideline or order or
interpretation or application thereof by any Governmental Authority charged
with the interpretation or administration thereof or compliance with any
request or directive of any central bank or other Governmental Authority
whether or not having the force of law (i) imposes, modifies or deems
applicable any reserve, special deposit or similar requirement against
assets held by, credit extended by, deposits with or for the account of, or
other acquisition of funds by, any Lender (other than requirements
expressly included herein in the determination of the applicable LIBOR
Optional Rate hereunder), or (ii) imposes upon any Lender any other
condition or expense with respect to this Agreement, or the making,
maintenance or funding of any part of the proceeds of a LIBOR Optional Rate
Advance or any security therefor; and the result of any of the foregoing is
to increase the cost to, reduce the income receivable by, or impose any
expense upon any Lender with respect to the outstanding balance of the
Loans bearing interest at a LIBOR Optional Rate or the making, maintenance
or funding of any part thereof by an amount which any Lender deems to be
material (any Lender being deemed for this purpose to have made, maintained
or funded the proceeds of a LIBOR Optional Rate Advance from certificates
of deposit), such Lender shall from time to time notify Borrower of the
amount determined in good faith (using any averaging and attribution
methods employed in good faith) by such Lender (which determination if made
in good faith shall be conclusive and binding upon Borrower) to be
necessary to compensate such Lender for such increase in cost, reduction in
income or additional expense. Such amount shall be due and payable by
Borrower to such Lender ten (10) Banking Days after such notice is given. A
certificate as to the amount of such increase in cost, reduction in income
or additional expense delivered by such Lender to Borrower shall be
conclusive as to such amount due and payable.
(g) In addition to the compensation required by Section 2.5(f), if (i)
any payment of a LIBOR Advance occurs on a date which is not the last day
of the applicable LIBOR Interest Period, whether because of acceleration,
prepayment or otherwise, (ii) a LIBOR Advance is not made on the date
specified by Borrower for any reason other than default by the Lenders, or
(iii) Borrower attempts to revoke (expressly, by later inconsistent notices
or otherwise) in whole or in part any notice stated herein to be
irrevocable (the Agent having in its sole discretion the option (y) to give
effect to such attempted revocation and obtain indemnity under this
Section, or (z) to treat such attempted revocation as having no force or
effect, as if never made), then Borrower will
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CREDIT AGREEMENT PAGE 21
indemnify each Lender for any loss or cost incurred by it resulting
therefrom, including, without limitation, any loss or cost in liquidating
or employing deposits acquired to fund or maintain such LIBOR Advance. If
any Lender sustains or incurs any such loss or expense it shall notify
Borrower of the amount determined in good faith by such Lender (which
determination shall be presumed to be correct) to be necessary to indemnify
such Lender for such loss or expense. Such amount shall be due and payable
by Borrower to such Lender ten (10) Banking Days after such notice is
given.
Section 2.6 Fees.
(a) Commitment Fee - Revolving Commitment. Borrower shall pay to the
Agent, for the pro rata benefit of the Lenders, a Commitment Fee equal to
the Applicable Fee on the average daily unborrowed portion of the Revolving
Commitment from the date hereof to and including the termination of the
Revolving Commitment Period, which fee shall be due and payable quarterly
in arrears, on the last day of each calendar quarter. Outstanding Swing
Line Loans shall be deemed to count as borrowed under the Revolving
Commitment. Such Commitment Fee shall be calculated on the basis of the
actual number of days elapsed and a Three Hundred Sixty (360) day year.
(b) Up Front Fees. Borrower shall pay the Agent, for the benefit of
the Lenders, the up front fees in accordance with the Offering Letter,
which shall be payable on the date hereof.
(c) Agent and Arrangement Fees. Borrower shall pay the Agent the
structuring, arranging and administrative agency fees set forth in the fee
letter between the Agent and Borrower dated January 23, 2002, payable at
the times and in the amounts set forth therein.
(d) Rates Applicable After Default. Subject to Section 8.5 hereof,
notwithstanding the Required Lenders may allow the election of a LIBOR
Optional Rate under Section 2.5(a) hereof while there exists a Default,
after the maturity of any Facility, whether by acceleration or otherwise,
and while and so long as there shall exist any uncured Default under any
Facility, the Facilities shall bear interest at a per annum rate equal to
Two Percent (2%) above the otherwise applicable rates, and the Letter of
Credit fees described in Section 2.10 shall be increased by Two Percent
(2%) above the otherwise applicable rate.
Section 2.7 Reductions of Revolving Commitment. Borrower may permanently
reduce the Revolving Commitments in whole, or in part ratably among the Lenders
in integral multiples of One Million Dollars ($1,000,000), upon at least three
(3) Banking Days' written notice to the Agent, which notice shall specify the
amount of any such reduction, provided, however, that the amount of the
Revolving Commitments may not be reduced below the aggregate principal amount of
the outstanding Revolving Loan Advances plus the aggregate principal amount of
the outstanding Swing Line Loans plus the face amount of any outstanding Letters
of Credit and unreimbursed drawings thereunder.
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CREDIT AGREEMENT PAGE 22
Section 2.8 Non-Receipt of Funds by the Agent.
(a) From the Lenders. Unless the Agent shall have received notice from
a Lender by 2:00 p.m. on a proposed Banking Day on which such Lender is to
provide funds to the Agent for a Loan to be made by such Lender that such
Lender will not make available to the Agent such funds, the Agent may
assume that such Lender has made such funds available to the Agent on the
date of such Loan in accordance with this Agreement and the Agent in its
sole discretion may, but shall not be obligated to, in reliance upon such
assumption, make available to Borrower on such date a corresponding amount.
If and to the extent such Lender has not made such funds available to the
Agent (and provided such Lender was given timely notice in accordance with
this Agreement), such Lender agrees to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon, for each
day from the date such amount is made available to Borrower until the date
such amount is repaid to the Agent, at a rate per annum equal to the
Federal Funds Effective Rate. If such Lender shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such Lender's
Loan for purposes of this Agreement. If such Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
shall promptly notify Borrower, and Borrower shall immediately pay such
corresponding amount to the Agent with interest thereon, for each day from
the date such amount is made available to Borrower until the date such
amount is repaid to the Agent, at the rate of interest applicable at the
time to the relevant Loan.
(b) From Borrower. Unless the Agent shall have received notice from
Borrower prior to the date on which any payment is due to the Lenders
hereunder that Borrower will not make such payment in full, the Agent may
assume that Borrower has made such payment in full to the Agent on such
date and the Agent in its sole discretion may, but shall not be obligated
to, in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender.
If and to the extent Borrower has not made such payment in full to the
Agent, each Lender shall repay to the Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day
from the date such amount is distributed to such Lender until the date the
Agent recovers such amount at a rate per annum equal to the Federal Funds
Effective Rate.
Section 2.9 Issuance of Letters of Credit. Subject to the terms and
conditions hereof, the LC Issuer agrees, upon receipt of a completed and
executed proper application, to issue on behalf of the Lenders from time to time
during the Revolving Commitment Period, commercial and standby Letters of Credit
for the account of Borrower. The commercial Letters of Credit shall have an
expiration date not later than the earlier of six months from the date of
issuance or one day before the expiration of the Revolving Commitment Period.
The standby Letters of Credit shall have an expiration date not later than one
day before the expiration of the Revolving Commitment Period. The aggregate of
the Letters of Credit outstanding plus the aggregate amount of unreimbursed
drawings under the Letters of Credit shall not exceed Seven Million Five Hundred
Thousand Dollars ($7,500,000). The amount of any Letter of Credit outstanding at
any time for all purposes hereof shall be the maximum amount which could be
drawn thereunder under any circumstances from and after the date of
determination. Each Letter of
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CREDIT AGREEMENT PAGE 23
Credit issued pursuant to this Agreement and each unreimbursed drawing
thereunder shall count against and reduce the Revolving Commitments by the
amount of such Letter of Credit outstanding unless and until such Letter of
Credit expires by its terms or otherwise terminates or the amount of a drawing
thereunder is reimbursed, in which event the Revolving Commitments shall be
reinstated by the amount of such Letter of Credit or the amount of such
reimbursement, as the case may be. Each such Letter of Credit shall conform to
the general requirements of the LC Issuer for the issuance of such credits, as
to form and substance, shall be subject to the Uniform Customs and Practices for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500 and shall be a letter of credit which the LC Issuer may
lawfully issue. Each payment of a Letter of Credit by the LC Issuer shall be
reimbursed by Advances under the Revolving Commitments evidenced by the
Revolving Notes. If and to the extent a drawing is at any time made under any
Letter of Credit, the LC Issuer shall notify Borrower, the Agent and the other
Lenders of such draw and Borrower agrees to pay to the LC Issuer immediately and
unconditionally upon demand for reimbursement, in lawful money of the United
States, an amount equal to each amount which shall be so drawn, together with
interest from the date of such drawing to and including the date such payment is
reimbursed to the LC Issuer or converted to Revolving Commitments as provided
herein. Until demand for reimbursement, such interest shall be calculated at a
variable rate per annum equal to the Alternate Base Rate plus the Applicable
Margin for Alternate Base Rate Loans, and interest shall be calculated after
such demand at a variable rate per annum equal to the Alternate Base Rate plus
the Applicable Margin for Alternate Base Rate Loans plus Two Percent (2%). All
such interest shall be calculated on the basis that an entire year's interest is
earned in Three Hundred Sixty (360) days. On the date of reimbursement, the LC
Issuer shall notify the Agent and the other Lenders by 12:00 Noon (Cleveland,
Ohio time) that Advances under the Revolving Commitments are required to
reimburse the LC Issuer. Borrower hereby irrevocably authorizes the Lenders to
refinance, without notice to Borrower, the reimbursement Obligation of Borrower
arising out of any such drawing into Revolving Loans, evidenced by the Revolving
Notes and for all purposes under, on and subject to the terms and conditions of
this Agreement, but without regard to the conditions precedent to making an
Advance under the Revolving Commitments or to any requirement of this Agreement
that each Revolving Loan be in a minimum amount or multiple; provided, however,
that an Advance under the Revolving Commitments in spite of Borrower's failure
to satisfy any conditions precedent to making an Advance shall not constitute a
waiver of any Default by the Lenders. This Agreement and the other Loan
Documents shall supersede any terms of any letter of credit applications or
other documents which are irreconcilably inconsistent with the terms hereof or
thereof. By 2:00 p.m. (Cleveland, Ohio time) on each date the Lenders have
received notice that Advances under the Revolving Commitments are required to
reimburse the LC Issuer for draws under the Letters of Credit, each Lender
severally agrees to make its portion of the Revolving Loans then being made by
making available to the Agent, either by wire transfer to the Agent's main
office in Indianapolis, Indiana, or by deposit to any correspondent account
which the Agent may maintain with that Lender, the amount to be advanced by such
Lender. By 2:30 p.m. (Cleveland, Ohio time) on each such date, the Agent shall
reimburse the LC Issuer, but only from funds received by the Agent, the amount
paid on Letters of Credit that date, either by wire transfer or by deposit to
the LC Issuer's
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CREDIT AGREEMENT PAGE 24
correspondent account with the Agent (or as otherwise agreed between the LC
Issuer and the Agent).
Section 2.10 Letters of Credit Participation and Fees. For administrative
convenience, the LC Issuer shall issue the Letters of Credit for the account of
Borrower pursuant to the arrangements set forth herein, and, the outstanding
portion of each Letter of Credit shall be deemed to utilize a Pro Rata Share of
the Revolving Commitment of each Lender. Each Lender severally agrees to
participate in each Letter of Credit issued by the LC Issuer hereunder according
to its Pro Rata Share of the Revolving Commitments. Each Lender's participation
shall be funded by funding its Pro Rata Share of the Revolving Commitments upon
any drawing under any Letter of Credit not reimbursed the same day as a drawing
thereunder by Borrower by 2:00 p.m. (Cleveland, Ohio time) by making such funds
available to the Agent in accordance with Section 2.4(a) and Section 2.9 hereof;
and thereupon, each such Lender shall be entitled to, and the LC Issuer or the
Agent, as applicable, shall remit to each such Lender, their respective Pro Rata
Share of any amounts (including any interest thereon) received by the LC Issuer
or the Agent, as applicable, in reimbursement of such drawing. The LC Issuer
shall furnish to such Lenders, each time any Letter of Credit either is issued
or drawn under (whether in whole or in part), a participation certificate
showing the aggregate amount of the LC Issuer's Letters of Credit issued and
unexpired or unfunded and the amount of their respective Pro Rata Share thereof.
Borrower agrees to pay to the LC Issuer, Letter of Credit fees of One-Eighth
Percent (1/8%) of the face amount of each commercial Letter of Credit (subject
to a minimum fee in each case of Fifty Dollars ($50)) and the Applicable Fee per
annum of the face amount of each standby Letter of Credit at the time of
issuance. Borrower shall also pay a negotiating fee equal to One-Eighth Percent
(1/8%) for drafts of commercial Letters of Credit presented for payment (subject
to a minimum fee in each case of Fifty Dollars ($50)). Such Letter of Credit
fees will be allocated among the Lenders in accordance with their respective Pro
Rata Shares and will be remitted to the other Lenders (a) promptly by the LC
Issuer with the participation certificate with respect to standby Letters of
Credit, and (b) quarterly in arrears with respect to commercial Letters of
Credit. The LC Issuer shall also be entitled to charge to Borrower and retain a
One-Eight Percent (1/8%) fronting fee for each Letter of Credit, payable
quarterly in arrears, and its standard and customary documentary and processing
fees in connection with the issuance or modification of, and draws under, the
Letters of Credit. After notice to Borrower, LC Issuer is authorized to collect
such fees by deducting the amount thereof from the deposit account of Borrower.
Section 2.11 Reimbursement of Letters of Credit. The obligation of Borrower
to reimburse any drawing under any Letter of Credit shall be absolute,
unconditional and irrevocable and shall be paid and performed strictly in
accordance with the terms of this Agreement under all circumstances, whatsoever,
including, without limitation, the following:
(a) any lack of validity or enforceability of any Letter of Credit, or
any Loan Document;
(b) any amendment or waiver of or consent to departure from the terms
of any Loan Document;
(c) the existence of any claim, setoff, defense or other right which
Borrower may have at any time against the beneficiary or any Letter of
Credit, any transferee of any Letter of Credit, the Lenders or any other
Person, whether in connection with the Loan Documents, such Letter of
Credit, or any unrelated transaction;
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CREDIT AGREEMENT PAGE 25
(d) any statement, draft or other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
whatsoever;
(e) the surrender or impairment of any security for the performance or
observance of the terms of the Loan Documents or such Letter of Credit; or
(f) any circumstance, happening or admission whatsoever, whether or
not similar to any of the foregoing, including, without limitation, those
matters described below.
The parties benefitted by any Letter of Credit shall be deemed to be
the agents of Borrower, and except as expressly set forth herein, Borrower
assumes all risks for their acts, omissions, or misrepresentations. Neither the
LC Issuer nor any of its affiliates or correspondents shall be responsible for
the validity, sufficiency, truthfulness or genuineness of any document required
to draw under any Letter of Credit even if such document should in fact prove to
be in any and all respects invalid, insufficient, fraudulent or forged, provided
only that the document appears on its face to be in accordance with the terms of
the Letter of Credit. The LC Issuer, its affiliates and correspondents shall not
be responsible for any failure of any draft to bear reference or adequate
reference to the applicable Letter of Credit or for the failure of any Person to
note the amount of any draft on any Letter of Credit or to surrender or take up
any Letter of Credit, each of which provisions may be waived by the LC Issuer,
or for errors, omissions, interruptions, or delays in transmission or delivery
of any messages or documents. Without limiting the generality of the foregoing,
Borrower agrees that any action taken by the LC Issuer or any of its affiliates
or correspondents under or in connection with any Letter of Credit shall be
binding upon Borrower and shall not put the LC Issuer or any such affiliates or
correspondents under any such resulting liability to Borrower except in the case
of gross negligence or willful misconduct. The LC Issuer shall not be liable for
consequential damages or for any action or failure to take action under or in
connection with any Letter of Credit except for any such action or failure to
take action which constitutes gross negligence or willful misconduct. The LC
Issuer is expressly hereby authorized to honor any request for payment which is
made under or in compliance with the terms of any Letter of Credit without
regard to and without any duty on its part to inquire into the existence of any
disputes or controversies between Borrower and any beneficiary of any Letter of
Credit or any other Person or into respective rights, duties or liabilities of
any of them or whether any facts or occurrences represented in any of the
documents presented under any Letter of Credit are true and correct. No Person,
other than the parties hereto, shall have any rights of any nature under this
Agreement or by reason hereof. The LC Issuer shall not be liable to the Lenders
participating in any Letter of Credit except for gross negligence or willful
misconduct in connection with such Letter of Credit. In no event shall the LC
Issuer's reliance and payment against documents presented under a Letter of
Credit appearing on its face to substantially comply with the terms thereof be
deemed to constitute gross negligence or willful misconduct.
Section 2.12 Use of Proceeds. The proceeds of Advances under the Revolving
Commitment and the Swing Line Loans shall be used for general working capital
purposes of
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CREDIT AGREEMENT PAGE 26
Borrower and its Subsidiaries, to fund acquisitions as permitted in this
Agreement and for other proper corporate purposes not prohibited by this
Agreement. The proceeds of the Term Loan shall be used to fund the Special Stock
Redemption and to fund the ESOP Loan.
Section 2.13 Lending Installations. Each Lender may book its Loans and its
participation in any Letters of Credit and the LC Issuer may book the Letters of
Credit at any Lending Installation selected by such Lender or the LC Issuer, as
the case may be, and may change its Lending Installation from time to time. All
terms of this Agreement shall apply to any such Lending Installation and the
Loans, the Letters of Credit, participations in the Letters of Credit and any
Notes issued hereunder shall be deemed held by each Lender or the LC Issuer, as
the case may be, for the benefit of any such Lending Installation. Each Lender
and the LC Issuer may, by written notice to the Agent and Borrower in accordance
with Section 12.11 hereof, designate replacement or additional Lending
Installations through which Loans will be made by it or the Letters of Credit
will be issued by it and for whose account Loan payments or payments with
respect to the Letters of Credit are to be made.
ARTICLE 3. SECURITY AND GUARANTY
Section 3.1 Collateral. Payment and performance of the Obligations shall be
secured by the Collateral Documents constituting (a) a first priority security
interest in all Accounts, Inventory, General Intangibles, Chattel Paper, Deposit
Accounts, Equipment, Fixtures, Instruments, Documents and all other domestic
current assets of Borrower and its Subsidiaries now owned or hereafter acquired
or now existing or hereafter arising, including all products and Proceeds of the
foregoing and all other property of Borrower and its Subsidiaries while in the
possession of any of the Lenders, (b) a first priority mortgage lien upon the
Real Estate, and (c) a first priority pledge of Borrower's interest in and to
the documents evidencing and securing the ESOP Loan, all subject only to
Permitted Encumbrances. Payment and performance of the Obligations shall also be
secured by a first priority pledge of all Capital Stock owned by Borrower in its
domestic Subsidiaries and sixty-six percent (66%) of the outstanding Capital
Stock of Borrower's foreign Subsidiaries.
Section 3.2 Guaranty. The Obligations of Borrower shall be unconditionally,
jointly and severally guaranteed by the Guarantors pursuant to their respective
Guaranty. In addition, any Subsidiary, created or acquired hereafter by Borrower
or a Guarantor, shall execute and deliver to the Agent, upon the earlier of such
acquisition or capitalization of such Subsidiary but in any event not later than
the date Borrower obtains an Advance to be used in connection with, or related
to, such Subsidiary, a Guaranty substantially in the form of Exhibit D hereto
and such other Collateral Documents, organizational documents, resolutions and
opinions as reasonably required by the Agent.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to make
Loans pursuant to their Revolving Commitments, Term Loan Commitments and Swing
Line Commitments, and to issue Letters of Credit, Borrower represents and
warrants to the Lenders, which representations and warranties will survive the
delivery of the Notes, the making of the Loans and the establishment of the
Facilities, that:
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CREDIT AGREEMENT PAGE 27
Section 4.1 Organization; Corporate Powers. Borrower and each of its
Subsidiaries (a) is a corporation or limited liability company duly organized,
validly existing and in existence under the laws of the jurisdiction of its
organization, (b) is duly qualified to do business as a foreign corporation or a
limited liability company and is in good standing under the laws of each
jurisdiction except where such failure to be so qualified and in good standing
could not reasonably be expected to have a Material Adverse Effect, and (c) has
all requisite corporate power and authority to own, operate and encumber its
property and to conduct its business as presently conducted and as proposed to
be conducted.
Section 4.2 Authority.
(a) Borrower and each of its Subsidiaries has the requisite corporate
power and authority to execute, deliver and perform each of the Loan
Documents.
(b) The execution, delivery and performance of each of the Loan
Documents which have been executed as required by this Agreement or
otherwise on or prior to the date hereof and to which Borrower or any of
its Subsidiaries is party, and the consummation of the transactions
contemplated thereby, have been duly approved by the respective boards of
directors or managers and, if necessary, the shareholders or members of
Borrower and its Subsidiaries, and such approvals have not been rescinded.
No other corporate action or proceedings on the part of Borrower or its
Subsidiaries are necessary to consummate such transactions.
(c) Each of the Loan Documents to which Borrower or any of its
Subsidiaries is a party has been duly executed, delivered or filed, as the
case may be, by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms (except as
enforceability may be limited by bankruptcy, insolvency, or similar laws
affecting the enforcement of creditors' rights generally), is in full force
and effect and no material term or condition thereof has been amended,
modified or waived from the terms and conditions contained in the Loan
Documents delivered to the Agent pursuant to Section 6.1 without the prior
written consent of the Required Lenders, and Borrower and its Subsidiaries
have, and, to the best of Borrower's and its Subsidiaries' knowledge, all
other parties thereto have, performed and complied with all the terms,
provisions, agreements and conditions set forth therein and required to be
performed or complied with by such parties on or before the date hereof,
and no unmatured default, default or breach of any covenant by any such
party exists thereunder.
Section 4.3 No Conflict. The execution, delivery and performance of each of
the Loan Documents to which Borrower or any of its Subsidiaries is a party do
not and will not (a) conflict with the certificate or articles of incorporation,
articles of organization, by-laws, or operating agreement of Borrower or any
such Subsidiary, (b) constitute a tortious interference with any Contractual
Obligation of any Person or conflict with, result in a breach of or constitute
(with or without notice or lapse of time or both) a default under any law, rule
or regulation of any Governmental Authority or Contractual Obligation of
Borrower or any such Subsidiary, or require termination of any Contractual
Obligation, except such interference, breach, default or termination which
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect, (c) result in or require the creation or imposition of
any Lien whatsoever upon any of the property or assets of Borrower or any such
Subsidiary, other than Liens permitted by the Loan Documents, or (d) require any
approval of Borrower's or any such Subsidiary's shareholders or members except
such as have been obtained.
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CREDIT AGREEMENT PAGE 28
Section 4.4 Financial Statements. The Financial Statements were prepared in
accordance with GAAP consistent with prior years, unless specifically otherwise
noted thereon, and fairly present the financial condition of Borrower as of the
date thereof and the results of its operations for the period then ended, and no
material adverse change in the business, operations, financial condition,
properties or prospects of Borrower has occurred since the date of the Financial
Statements.
Section 4.5 No Material Adverse Change. Since December 31, 2001, there has
occurred no material adverse change in the business, financial condition,
operations or prospects of Borrower and its Subsidiaries taken as a whole or any
other event which has had or could reasonably be expected to result in a
Material Adverse Effect.
Section 4.6 Taxes.
(a) Tax Examinations. All deficiencies which have been asserted
against Borrower or any of Borrower's Subsidiaries as a result of any
federal, state, local or foreign tax examination for each taxable year in
respect of which an examination has been conducted have been fully paid or
finally settled or are being contested in good faith, and as of the date
hereof no issue has been raised by any taxing authority in any such
examination which, by application of similar principles, reasonably can be
expected to result in assertion by such taxing authority of a material
deficiency for any other year not so examined which has not been reserved
for in Borrower's Financial Statements to the extent, if any, required by
GAAP. Neither Borrower nor any of Borrower's Subsidiaries anticipates any
material tax liability with respect to the years which have not been closed
pursuant to applicable law.
(b) Payment of Taxes. Except as described on Schedule 4.6, all tax
returns and reports of Borrower and its Subsidiaries required to be filed
have been timely filed, and all taxes, assessments, fees and other
governmental charges thereupon and upon their respective property, assets,
income and franchises which are shown in such returns or reports to be due
and payable have been paid except those items which are being contested in
good faith and have been reserved for in accordance with GAAP. Borrower has
no knowledge of any proposed tax assessment against Borrower or any of its
Subsidiaries that will have or could reasonably be expected to have a
Material Adverse Effect.
Section 4.7 Litigation; Loss Contingencies and Violations. Except as set
forth in Schedule 4.7, there is no action, suit, proceeding, arbitration or
investigation before or by any Governmental Authority or private arbitrator
pending or, to Borrower's knowledge, threatened against Borrower or any of its
Subsidiaries or any property of any of them which will have or could reasonably
be expected to have a Material Adverse Effect. There is no material loss
contingency within the meaning of GAAP which has not been reflected in the
Financial
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CREDIT AGREEMENT PAGE 29
Statements for the fiscal period during which such material loss contingency was
incurred. Neither Borrower not any of its Subsidiaries is (a) in violation of
any applicable law, rule or regulation of any Governmental Authority which
violation will have or could reasonably be expected to have a Material Adverse
Effect, or (b) subject to or in default with respect to any final judgment,
writ, injunction, restraining order or order of any nature, decree, rule or
regulation of any court or Governmental Authority which will have or could
reasonably be expected to have a Material Adverse Effect.
Section 4.8 Subsidiaries. Schedule 4.8 (a) contains a description of the
corporate structure of Borrower, its Subsidiaries and any other Person in which
Borrower or any of its Subsidiaries holds an equity interest (both narratively
and in chart form); and (b) accurately sets forth (i) the correct legal name,
the jurisdiction of incorporation and the jurisdictions in which each of
Borrower and the direct or indirect Subsidiaries of Borrower is qualified to
transact business as a foreign corporation, (ii) the authorized, issued and the
outstanding shares of each class of Capital Stock of Borrower and each of its
Subsidiaries and the owners of such shares (both as of the date hereof and on a
fully-diluted basis), and (iii) a summary of the direct and indirect
partnership, joint venture, or other equity interests, if any, of Borrower and
each Subsidiary of Borrower in any Person that is not a corporation. Except for
the Special Stock Redemption and as described on Schedule 4.8, none of the
issued and outstanding Capital Stock of Borrower or any of its Subsidiaries is
subject to any vesting, redemption, or repurchase agreement, and there are no
warrants or options outstanding with respect to such Capital Stock. The
outstanding Capital Stock of Borrower and each of Borrower's Subsidiaries is
duly authorized, validly issued, fully paid and nonassessable.
Section 4.9 ERISA. With respect to pension, retirement, stock option, stock
purchase, stock appreciation rights, savings or profit sharing plan, program,
arrangement, or agreement (including trust agreements and insurance contracts
implementing plans, programs, arrangements, or agreements), or any deferred
compensation, consulting, bonus, incentive compensation, group insurance,
severance or termination pay, welfare or employee benefit plan, program,
arrangement or agreement (the "Employee Benefit Plans"), relating to employees
or former employees of Borrower or any ERISA Affiliate:
(a) Borrower and each ERISA Affiliate have complied in all material
respects with all of the applicable reporting and disclosure requirements of
ERISA and the Code. All reports required by any governmental agency with respect
to each Employee Benefit Plan have been filed.
(b) Each Employee Benefit Plan (including, without limitation, the
ESOP) complies in all material respects in form and in operation with the
requirements of Section 401(a) of the Code, the relevant provisions of ERISA,
and any other applicable laws, rules, and regulations. All contributions to, and
payments from, the Employee Benefit Plans required to be made in accordance with
the terms of the Employee Benefit Plans have been made or have been accrued and
are reflected on the Financial Statements. Borrower has received or applied for
in a timely manner current favorable determination letters from the IRS with
respect to each Employee Benefit Plan (other than the ESOP) which is intended to
comply with the provisions of Section 401(a) of the Code.
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CREDIT AGREEMENT PAGE 30
(c) Neither Borrower nor any ERISA Affiliate, nor any trustee,
administrator, or fiduciary of any Employee Benefit Plans, has (i) engaged in a
"prohibited transaction," as that term is defined in Section 4975 of the Code or
Section 406 of ERISA, which could directly or indirectly subject the applicable
Employee Benefit Plan, Borrower or an ERISA Affiliate to any liability for a tax
or penalty imposed by Section 4975 of the Code or Section 502(i) of ERISA, or
(ii) committed a breach of its fiduciary duties (as defined in Section 404 of
ERISA) which could directly or indirectly subject the applicable Employee
Benefit Plan, Borrower, or an ERISA Affiliate to any liability under Section 502
of ERISA. There has not occurred any complete or partial withdrawal from, nor
has there occurred any other event, which would constitute grounds for
termination of or the appointment of a trustee to administer any Employee
Benefit Plan (including any "multi-employer plan") maintained for employees of
Borrower or any ERISA Affiliate, all within the meanings ascribed by ERISA,
which would have a Material Adverse Effect.
(d) No actions, suits, or claims with respect to the assets of the
Employee Benefit Plans are pending or threatened that if resolved in a
unfavorable manner would have a Material Adverse Effect, and Borrower has no
knowledge of any facts which could give rise to or could reasonably be expected
to give rise to any actions, suits, or claims with respect to the assets of the
Employee Benefit Plans; and
(e) Neither Borrower nor any ERISA Affiliate, nor any director,
officer, employee, or any other "fiduciary," as that term is defined in Section
3(21) of ERISA, of Borrower or of any ERISA Affiliate, has any material
liability for failure to comply with ERISA or the Code for any action or failure
to act in connection with the administration or investment of any of the
Employee Benefit Plans.
Section 4.10 Accuracy of Information. The information, exhibits and reports
furnished by or on behalf of Borrower and any of its Subsidiaries to the Agent
or to any Lender in connection with the negotiation of, or compliance with, the
Loan Documents, the representations and warranties of Borrower and its
Subsidiaries contained in the Loan Documents, and all certificates and documents
delivered to the Agent and the Lenders pursuant to the terms thereof, taken as a
whole, do not contain as of the date furnished any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
Section 4.11 Material Agreements. Neither Borrower nor any of its
Subsidiaries has received notice or has knowledge that (a) it is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any Contractual Obligation applicable to it, or (b)
any condition exists which, with the giving of notice or the lapse of time or
both, would constitute a default with respect to any such Contractual
Obligation, in each case, except where such default or defaults, if any,
individually or in the aggregate will not have or could not reasonably be
expected to have a Material Adverse Effect.
Section 4.12 Compliance with Laws. Borrower and its Subsidiaries are in
compliance with all applicable requirements of law and of all Governmental
Authorities, in each case where the failure to so comply individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
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CREDIT AGREEMENT PAGE 31
Section 4.13 Assets and Properties. Borrower and each of its Subsidiaries
has good and marketable title to all of its assets and properties (tangible and
intangible, real or personal) owned by it or a valid leasehold interest in all
of its leased assets, and all such assets and property are free and clear of all
Liens, except Permitted Encumbrances. Substantially all of the assets and
properties owned by, leased to or used by Borrower and/or each such Subsidiary
of Borrower are in adequate operating condition and repair, ordinary wear and
tear excepted. Neither this Agreement nor any other Loan Document, nor any
transaction contemplated under any such agreement, will affect any right, title
or interest of Borrower or such Subsidiary in and to any of such assets in a
manner that would have or could reasonably be expected to have a Material
Adverse Effect.
Section 4.14 Insurance. Borrower maintains insurance policies and programs
reasonably consistent with prudent industry practice.
Section 4.15 Environmental Matters. (a) Except as disclosed on Schedule
4.15:
(i) the operations of Borrower and its Subsidiaries comply in all
material respects with Environmental Laws;
(ii) Borrower and its Subsidiaries have all permits, licenses or other
authorizations required under Environmental Laws;
(iii) neither Borrower, any of its Subsidiaries nor any of their
respective present property or operations, or, to the best of, Borrower's
or any of its Subsidiaries' knowledge, any of their respective past
property or operations, are subject to or the subject of, any investigation
known to Borrower or any of its Subsidiaries, any judicial or
administrative proceeding, order, judgment, decree, settlement or other
agreement respecting: (A) any material violation of Environmental Laws; (B)
any remedial action; or (C) any material claims or liabilities arising from
the Release or threatened Release of a Contaminant into the environment;
(iv) there is not now, nor to the best of Borrower's or any of its
Subsidiaries' knowledge has there ever been on or in the property of
Borrower or any of its Subsidiaries any landfill, waste pile, underground
storage tanks, aboveground storage tanks, surface impoundment or hazardous
waste storage facility of any kind, any polychlorinated biphenyls (PCBs)
used in hydraulic oils, electric transformers or other equipment, or any
asbestos containing material which in any such case could reasonably be
expected to result in material liability for Borrower or any of its
Subsidiaries; and
(v) neither Borrower nor any of its Subsidiaries has any material
Contingent Obligation in connection with any Release or threatened Release
of a Contaminant into the environment.
(B) For purposes of this Section 4.15 "material" means any noncompliance or
basis for liability which could reasonably be likely to subject Borrower to
liability in excess of Five Million Dollars ($5,000,000).
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CREDIT AGREEMENT PAGE 32
Section 4.16 Solvency. After giving effect to the (a) Loans to be made on
the date hereof or such other date as Loans requested hereunder are made and the
consummation of the other transactions contemplated by this Agreement, and (b)
the payment and accrual of all transaction costs with respect to the foregoing,
Borrower and its Subsidiaries taken as a whole is Solvent. After giving effect
to (i) any permitted transaction under Section 5.2(h) hereof, and (ii) the
payment and accrual of all transaction costs with respect thereto, Borrower and
its Subsidiaries taken as a whole is Solvent.
Section 4.17 Indebtedness. Except as shown on the Financial Statements,
except trade debt incurred in the ordinary course of business since the date of
the Financial Statements, except for Indebtedness of Borrower owed to a
Guarantor and Indebtedness of a Guarantor owed to Borrower or another Guarantor,
and except as shown on Schedule 4.17 hereto, Borrower and its Subsidiaries have
no outstanding Indebtedness.
Section 4.18 Contracts of Surety. Except for the endorsements of Borrower
and its Subsidiaries of negotiable instruments for deposit or collection in the
ordinary course of business and except for guaranties of trade debt of
Subsidiaries and other operating obligations of Subsidiaries incurred in the
ordinary course of business, neither Borrower nor its Subsidiaries is a party to
any contract of guaranty or surety.
Section 4.19 Licenses. Borrower and each Subsidiary possesses such
franchises, licenses, permits, patents, copyrights, trademarks, and consents of
appropriate Governmental Authorities to own its property and as are necessary to
carry on its business as presently conducted.
Section 4.20 Force Majeure. Neither the business nor the properties of
Borrower are presently affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act
of God or of the public enemy or other casualty materially adversely affecting
the business, operations, financial condition, properties or prospects of
Borrower.
Section 4.21 Margin Stock. Neither Borrower nor any of its Subsidiaries is
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System), and, except as contemplated in the
Repurchase Documents, no part of the proceeds of the Facilities will be used,
either directly or indirectly, for the purpose, whether immediate, incidental or
remote, of purchasing or carrying any margin stock or of extending credit to
others for the purpose of purchasing or carrying any margin stock. Borrower
shall furnish to the Lenders, a statement in conformity with the requirements of
Federal Reserve Board Form U-1 referred to in Regulation U. Further, no part of
the proceeds of the Facilities will be used for any purpose that violates, or
which is inconsistent with, the provisions of Regulations T, U or X of the Board
of Governors.
Section 4.22 Approvals. No authorization, consent, approval or any form of
exemption of any Governmental Authority is required in connection with the
execution and delivery by Borrower or its Subsidiaries, as applicable, of the
Loan Documents, the borrowings and performance thereunder or the issuance of the
Notes.
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CREDIT AGREEMENT PAGE 33
Section 4.23 Regulation. Neither Borrower nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company" or an "affiliate of a holding company" or a
"subsidiary of a holding company" within the meanings of the Public Utility
Holding Company Act of 1935, as amended.
Section 4.24 Special Stock Redemption. The Special Stock Redemption will
not violate any law, rule, regulation, order, writ, judgment, decree or award
binding upon Borrower or any provision of its articles of incorporation or
by-laws or any provision of any indenture, instrument or agreement to which
Borrower is a party or by which it or its assets may be bound or affected; (b)
each of the Repurchase Documents constitutes a legal, valid and binding
obligation of Borrower, enforceable in accordance with its terms (except as
enforceability may be limited by bankruptcy, insolvency, or similar laws
affecting the enforcement of creditors' rights generally); (c) no authorization,
consent, approval, registration, license or any form of exemption of any
Governmental Authority is required in connection with the payment of the Special
Stock Redemption except for such consents as have been obtained and delivered to
the Agent; and (d) the payment of the consideration for the Special Stock
Redemption is lawful under Delaware law.
Section 4.25 ESOP. (a) The ESOP is an "employee stock ownership plan"
within the meaning of Section 4975(e)(7) of the Code and is qualified under
Section 401(a) of the Code. The ESOP has been duly established in accordance
with and under applicable law and it is a tax-exempt trust under Section 501(a)
of the Code.
(b) The ESOP Loan and the purchase of Borrower's stock by the ESOP with the
proceeds from the ESOP Loan, will not: (i) involve a prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code for which there is no
exemption under Section 408 of ERISA or Section 4975 of the Code, respectively;
(ii) be a violation of the fiduciary responsibility standards imposed by Section
404 of ERISA; or (iii) adversely affect the qualified status of the ESOP under
Sections 401(a) or 4975(e)(7) of the Code. The shares acquired by the ESOP are
"employer securities," within the meaning of Section 409(l) of the Code.
Section 4.26 General. All statements contained in any certificate or
financial statement delivered by or on behalf of Borrower to the Lenders under
any Loan Document shall constitute representations and warranties made by
Borrower hereunder.
Section 4.27 Supplemental Disclosure. At any time at the request of the
Agent and at such additional times as Borrower determines, Borrower shall
supplement each schedule or representation herein or in the other Loan Documents
with respect to any matter hereafter arising which, if existing or occurring at
the date hereof, would have been required to be set forth or described in such
schedule or as an exception to such representation or which is necessary to
correct any information in such schedule or representation which has been
rendered inaccurate thereby. If any such supplement to such schedule or
representation discloses the existence or occurrence of events, facts or
circumstances which are restricted or prohibited by the terms of this Agreement
or any other Loan Documents, such supplement to such schedule or representation
shall not be deemed an amendment thereof unless expressly consented to in
writing by the Agent and the Required Lenders, and no such amendments, except as
the same may be consented to in a writing which expressly includes a waiver,
shall be or be deemed a waiver by the Agent or any Lender of any Default
disclosed therein. Any items disclosed in any such supplemental disclosures
shall be included in the calculation of any limits, baskets or similar
restrictions contained in this Agreement or any of the other Loan Documents.
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CREDIT AGREEMENT PAGE 34
ARTICLE 5. COVENANTS
Section 5.1 Affirmative Covenants. Until the Obligations are paid in full,
and so long as any Revolving Commitment, Term Loan Commitment or any Letter of
Credit is outstanding, unless the Required Lenders shall otherwise consent in
writing, Borrower will:
(a) Financial Reporting. Furnish (enough copies for each of the Lenders) to
the Agent:
(i) As soon as practicable, but in any event within ninety (90) days
after the end of each fiscal year, consolidated financial statements of
Borrower certified after audit by certified public accountants acceptable
to the Lenders, including a balance sheet, statement of income and retained
earnings and a statement of cash flows, with accompanying notes to
financial statements all prepared in accordance with GAAP on a consolidated
basis consistent with prior years unless specifically noted thereon, and
accompanied by an unqualified opinion of said accountants, and further
accompanied by a certificate of the chief financial officer of Borrower
that there exists no Default or Unmatured Default under the Loan Documents,
or if any Default or Unmatured Default exists, stating the nature and
status thereof;
(ii) As soon as practicable, but in any event within forty-five (45)
days after the end of each of Borrower's first three (3) fiscal quarters,
similar unaudited consolidated statements of Borrower and its Subsidiaries
as of the end of such quarter and the results of their operations for the
portion of the fiscal year then elapsed, all prepared in accordance with
GAAP on a consolidated basis consistent with prior periods, subject to
normal audit and year-end adjustments, unless specifically otherwise noted
thereon, and accompanied by the certificate of the chief financial officer
of Borrower that there exists no Default or Unmatured Default under the
Loan Documents or if any Default or Unmatured Default exists, stating the
nature and status thereof;
(iii) Within three (3) days of receipt by Borrower, a copy of the
auditor's management letter describing any deficiencies in the internal
controls or other matters of significance discovered by the auditor during
the course of its audit;
(iv) As soon as practicable, but in any event within forty-five (45)
days after the end of each of Borrower's first three (3) fiscal quarters
and within ninety (90) days after the end of each fiscal year, a fully
executed and completed Compliance Certificate, signed by the chief
executive or chief financial officer of Borrower;
(v) As soon as practicable, but in any event within five (5) days
after Borrower becomes aware thereof, a written statement signed by the
chief executive or chief financial officer of Borrower as to the occurrence
of any Default or Unmatured Default stating the specific nature thereof,
Borrower's intended action to cure the same and the time period in which
such cure is to occur;
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CREDIT AGREEMENT PAGE 35
(vi) As soon as practicable, but in any event within ten (10) days
after the commencement thereof, a written statement describing any
litigation instituted by or against Borrower which, if adversely
determined, may have a Material Adverse Effect;
(vii) As soon as practicable, but in any event within ten (10) days
after Borrower becomes aware thereof, a written statement signed by the
chief executive officer or the chief financial officer of Borrower
describing any Reportable Event, Prohibited Transaction or complete or
partial withdrawal from a multi-employer plan which has occurred with
respect to any Employee Benefit Plan (all within the meanings ascribed by
ERISA) and the action which Borrower proposes to take with respect thereto;
(viii) As soon as practicable, but in any event within ten (10) days
after the filing with the Securities and Exchange Commission, or any
successor thereto, or any states' securities regulatory authority, copies
of all registration statements and all periodic and special reports
required or permitted to be filed under federal or state securities laws
and regulations;
(ix) As soon as available, but in any event within 45 days after the
beginning of each fiscal year of Borrower, a copy of Borrower's budget for
such fiscal year; and
(x) Such other information as the Lenders may from time to time
reasonably request.
(b) Good Standing. Maintain, and cause each Subsidiary to maintain, its
corporate existence, good standing (if applicable), and right to do business.
(c) Taxes, Etc. Pay and discharge, and cause each Subsidiary to pay and
discharge, all taxes, assessments, judgments, orders, and governmental charges
or levies imposed upon it or on its income or profits or upon its property prior
to the date on which penalties attach thereto and all lawful claims which, if
unpaid, may become a Lien upon the property of Borrower or a Subsidiary,
provided that Borrower and its Subsidiaries shall not be required to pay any
tax, assessment, charge, judgment, order, levy or claim, if such payment is
being contested diligently, in good faith, and by appropriate proceedings which
will prevent foreclosure or levy upon its property and adequate reserves against
such liability have been established.
(d) Maintain Properties. Maintain, and cause each Subsidiary to maintain,
all properties and assets used by, or useful to, Borrower or such Subsidiary in
the ordinary course of its business in good working order and condition and
suitable for the purpose for which it is intended, and from time to time, make
any necessary repairs and replacements.
(e) Insurance. Maintain, and cause each Subsidiary to maintain, in full
force and effect public liability insurance, business interruption insurance,
worker's compensation insurance and casualty insurance policies with financially
sound and reputable insurance companies and with coverages consistent with sound
business practice. Each policy
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CREDIT AGREEMENT PAGE 36
providing liability coverage shall be endorsed to reflect "National City Bank of
Indiana, as Agent" on behalf of the Lenders as an additional insured, and each
such policy covering properties pledged as collateral to the Agent shall have a
mortgagee and lender's loss payable clause in favor of "National City Bank of
Indiana, as Agent." If requested by the Agent, a copy of each policy,
accompanied by a certificate of coverage issued by the insurance carrier, shall
be delivered to the Agent. Such policy shall stipulate that the insurance cannot
be canceled or materially modified without thirty (30) days' prior written
notice to the Agent and shall insure the Agent notwithstanding the act or
neglect of Borrower or its Subsidiaries.
(f) Books and Records. Keep proper books of account in which full, true and
correct entries will be made of all dealings and transactions of and in relation
to the business and affairs of Borrower, and, at all reasonable times, and as
often as the Lenders may reasonably request, permit authorized representatives
of the Lenders to (i) have access to the premises and properties of Borrower and
to the records relating to the operations of Borrower; (ii) make copies of or
excerpts from such records; (iii) discuss the affairs, finances and accounts of
Borrower with and be advised as to the same by the chief executive and financial
officers of Borrower; and (iv) audit and inspect such books, records, accounts,
memoranda and correspondence at all reasonable times, to make such abstracts and
copies thereof as the Lenders may deem necessary, and to furnish copies of all
such information to any proposed purchaser of or participant in the Facilities.
So long as there exists no Default, the costs and expenses associated with such
audits and inspections shall be borne by the Lenders. If the Agent or the
Lenders request after the occurrence of a violation of a financial covenant or
the violation of any covenant contained in Section 5.2 hereof, Borrower shall
furnish to the Lenders consolidating financial statements of Borrower and its
Subsidiaries.
(g) Reports. File, and cause each Subsidiary to file, as appropriate, on a
timely basis, annual reports, operating records and any other reports or filings
required to be made with any Governmental Authority.
(h) Licenses. Maintain, and cause each Subsidiary to maintain, in full
force and effect all operating permits, licenses, franchises, and rights used by
it in the ordinary course of business.
(i) Notice of Material Adverse Change. Give prompt notice in writing to the
Lenders of the occurrence of any development, financial or otherwise, including
pending or threatened litigation, which might have a Material Adverse Effect.
(j) Conduct of Business. Carry on and conduct its business in substantially
the same manner and in substantially the same fields of enterprise as presently
conducted, and do all things necessary to remain duly incorporated, validly
existing and in good standing (if applicable) as a corporation in its
jurisdiction of incorporation and maintain all requisite authority to conduct
its respective business in each jurisdiction in which conducted.
(k) Compliance with Laws. Comply, and cause each Subsidiary to comply, with
all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which Borrower or such Subsidiary may be subject, except where the
failure to comply would not have a Material Adverse Effect.
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CREDIT AGREEMENT PAGE 37
(l) Use of Proceeds. Use the proceeds of the Facilities solely for the
purposes herein described.
(m) Loan Payments. Subject to any applicable grace or cure periods,
punctually pay or cause to be paid principal and interest on the Facilities in
lawful money of the United States at the time and places and in the manner
specified herein according to the stated terms and the true intent and meaning
hereof.
(n) Notice of Environmental Matters/Environmental Audits. In the event: (i)
any premises which have at any time been owned or occupied by or have been under
lease to Borrower or any Subsidiary are the subject of an environmental
investigation by any Governmental Authority having jurisdiction over the
regulation of hazardous substances or Environmental Laws, the purpose of which
investigation is to quantify the levels of hazardous substances located on such
premises, or (ii) Borrower or any Subsidiary have been named or are overtly
threatened in writing to be named as a party responsible for the possible
contamination of any real property or ground water with hazardous substances,
including, but not limited to the contamination of past and present waste
disposal sites; then Borrower shall make a reasonable determination of its or
its Subsidiary's potential liability, and if such liability for any such event
or events described in (i) or (ii) above exceeds in the aggregate One Million
Dollars ($1,000,000), Borrower shall then notify the Lenders immediately.
After such notification to the Lenders, Borrower shall, if required
pursuant to GAAP, establish appropriate reserves against such potential
liabilities and, upon the reasonable request of the Required Lenders, engage a
firm or firms of engineers or environmental consultants appropriately qualified
to determine as quickly as practical the extent of contamination and the
potential financial liability of Borrower with respect thereto, and the Lenders
shall be provided with a copy of any report prepared by such firm or by any
Governmental Authority as to such matters as soon as any such report becomes
available to Borrower. Provided, however, if Borrower determines in good faith
that it would not be in the best interest of Borrower or a Subsidiary to cause
an investigation to be made, Borrower shall report such determination to the
Lenders, and if the Required Lenders concur in such determination, which
concurrence shall not be unreasonably withheld, Borrower and/or its Subsidiary
shall be excused from obtaining such investigation and report as otherwise would
be required. The selection of any engineers or environmental consultants engaged
pursuant to the requirements of this Section shall be subject to the approval of
the Required Lenders, which approval shall not be unreasonably withheld.
At any time after the date hereof when the Leverage Ratio is equal to or
greater than 2.75 to 1.0, upon the written request of the Required Lenders,
Borrower will promptly obtain such environmental audits of the Real Estate as
reasonably required by the Required Lenders.
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CREDIT AGREEMENT PAGE 38
(o) Banking Accounts. Maintain its primary banking accounts (consisting
generally of its collection, disbursement, concentration and depository
accounts) with National City.
(p) ESOP. With respect to the ESOP: (i) take all necessary actions to
preserve and keep the ESOP in effect and comply in all material respects with
the terms of the ESOP Plan; (ii) comply in all material respects with the Code
and ERISA as applicable to the ESOP and with all other laws and regulations
applicable thereto, (iii) furnish to the Agent as soon as practicable, copies of
the ERISA annual reports, any ESOP valuation reports, IRS determination letter,
notices, financial statements and repurchase liability studies; (iv) permit the
Agent to examine the books, records and other documents relating to the
properties and affairs of the ESOP in the possession of Borrower which it has
authority to disclose and to make memorandum and extracts from such books,
records and other documents, and discuss with any representative of the Agent
the affairs, finances and accounts of the ESOP; (v) take all necessary actions
to cause and permit the ESOP to pay and discharge from the assets of the ESOP
all taxes, fees, assessments and governmental charges or levies imposed upon the
ESOP, or upon the ESOP's income or profits or upon any of the property of the
ESOP prior to the date on which penalties attach thereto, and pay all lawful
claims which, if unpaid, might become a Lien; (vi) promptly give notice in
writing to the Agent of any late contribution to the ESOP or of any late filing
of an annual report or other document required to be filed with a Governmental
Agency or of any litigation involving the ESOP of which Borrower has knowledge
and of any other matter of which Borrower has knowledge which has a substantial
likelihood of materially adversely affecting the financial condition, affairs or
operations of the ESOP or of Borrower, stating, to the extent of Borrower's
knowledge thereof, the nature thereof, and the course of action proposed to be
taken in connection therewith, if any; (vii) operate the ESOP to meet the
requirements of (A) Section 410(b) of the Code, relating to non-discrimination
in participation, (B) Section 401(a)(4) of the Code, relating to prohibited
discrimination in favor of officers, shareholders or highly compensated
employees, and (C) Section 401(a)(28) of the Code, relating to diversification
of investments and use of an independent appraiser; (viii) take all necessary
actions to apply for and obtain a favorable determination letter from the IRS
that the ESOP is tax-qualified and tax-exempt under Sections 401(a) and 501(a),
respectively, of the Code and is an "employee stock ownership plan" within the
meaning of Section 4975(e)(7) of the Code; and (ix) Borrower will make
contributions to the ESOP sufficient to enable the trustee of the ESOP to pay in
a timely manner all scheduled principal and interest repayments due under the
ESOP Loan.
(q) Title Insurance. If the Leverage Ratio equals or exceeds 2.75 to 1.0,
the Agent shall obtain, at Borrower's expense, an ALTA standard mortgagee's
policy of title insurance issued by a reputable title insurer in an amount
acceptable to the Agent (but not to exceed the fair market value of the
applicable Real Estate) with respect to each Mortgage, containing the agreement
of the title insurer to insure the required priority of the Mortgage, free of
standard policy exceptions, reflecting that title to the Real Estate is free of
defects other than the Permitted Encumbrances (such title policy shall be
further endorsed to provide a 3.0 zoning endorsement, a comprehensive
endorsement, a last dollar endorsement, a revolving credit endorsement, and such
other endorsements as the Agent may request).
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CREDIT AGREEMENT PAGE 39
(r) Survey. If the Leverage Ratio equals or exceeds 2.75 to 1.0, the Agent
shall obtain, at Borrower's expense an ALTA minimum standard survey of the Real
Estate with the signature and seal of a registered engineer or surveyor affixed
showing all easements and other matters affecting the Real Estate or apparent
thereon, the relation of the Real Estate to public thoroughfares for access
purposes, the location of all improvements and such other matters as the Agent
may reasonably request. Such survey shall further certify that the Real Estate
is not located within a special flood hazard area as defined by the Flood
Disaster Protection Act of 1973, and shall specify the flood hazard zone in
which the Real Estate is situated.
(s) Post-Closing Covenant. Within ninety (90) days of the date hereof, (a)
use its reasonable best efforts to procure landlord and warehousemen lien
waivers, in the form prescribed or approved by the Agent, with respect to
Borrower's and its Subsidiaries' Equipment and Inventory located at facilities
not owned by a Borrower or a Guarantor, and (b) furnish the Agent with real
estate title searches confirming the applicable Guarantor's ownership of the
Real Estate.
Section 5.2 Negative Covenants. Until the Obligations are paid in full, and
so long as any Revolving Commitment, Term Loan Commitment or any Letter of
Credit is outstanding, unless the Required Lenders shall otherwise consent in
writing, Borrower will not and will not permit any Subsidiary to:
(a) Dispose of Property. Sell, transfer, lease or otherwise dispose of
its assets or properties, or discount, with or without recourse, any of its
accounts, except (i) sales from inventory in the ordinary course of
business, (ii) the sale of obsolete equipment and machinery in the ordinary
course of business, and (iii) sales of assets for cash and for fair value
in any fiscal year of Borrower in an aggregate amount for Borrower and its
Subsidiaries not to exceed One Million Dollars ($1,000,000), and, provided
there exists no Default and no Default would be occasioned thereby, such
additional sales of assets above such One Million Dollars ($1,000,000)
limitation provided the proceeds of such additional sales are paid to the
Lenders to permanently reduce pro rata the Term Loans and the Lenders'
Revolving Commitments as provided in Section 2.3(d) hereof.
(b) Further Encumber. Except for Permitted Encumbrances, voluntarily
create or suffer to exist any Lien upon any of its properties or assets,
real or personal, tangible or intangible, whether now owned or hereafter
acquired.
(c) Dividends. Declare or pay any dividends on its Capital Stock.
(d) Purchase Stock. Purchase, redeem, retire or otherwise acquire any
outstanding shares of its Capital Stock, except (i) for the Special Stock
Redemption, (ii) provided there exists no Default and no Default would be
occasioned thereby, Borrower may purchase stock from executives of Borrower
pursuant to its executive compensation program in an amount not exceeding
(A) Three Million Dollars ($3,000,000) in the aggregate in any fiscal year
through fiscal year end 2003, and (B) Four Million Dollars ($4,000,000) in
the aggregate in any fiscal year thereafter, and (iii) provided there
exists no Default and no Default would be occasioned thereby, purchases of
stock from former ESOP participants of Borrower to the extent required by
law.
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CREDIT AGREEMENT PAGE 40
(e) Borrowings. Create, incur, assume or suffer to exist any
Indebtedness, except (i) that in existence as of the date hereof and
disclosed in the Financial Statements, (ii) trade accounts and normal
business accruals payable in the ordinary course of business, (iii)
Indebtedness to the Lenders pursuant to the Loan Documents, (iv) as
permitted in Section 5.2(f) hereof, and (v) other Indebtedness of Borrower
and its Subsidiaries not exceeding in the aggregate One Million Dollars
($1,000,000) outstanding at any time.
(f) Loans, Etc. Make any loan, disbursement or advance to, or
investment in, any Person except (i) trade debtors in the ordinary course
of business, (ii) loans and advances to a Subsidiary that is a Guarantor,
provided there exists no Default or Unmatured Default at the time, or after
giving effect to, such loan or advance and provided the Subsidiary is not
"insolvent" at the time of such loan or advance nor rendered "insolvent"
(as such terms are used in the Federal Bankruptcy Code) by such loan or
advance, and loans and advances to Borrower by a Guarantor, (iii) Qualified
Investments, and (iv) with respect to a Target acquired pursuant to Section
5.2(h) hereof, notes receivable owed to the Target as of such acquisition.
(g) Contingent Obligations. Directly or indirectly create or become or
be liable with respect to any Contingent Obligation, except for (i) the
endorsements by Borrower or a Subsidiary of negotiable instruments for
deposit or collection in the ordinary course of business, (ii) guarantees
in favor of the Lenders, and (iii) guarantees of the Indebtedness of
Affiliates not exceeding in the aggregate for Borrower and its Subsidiaries
Five Million Dollars ($5,000,000).
(h) Merger, Acquisitions, Etc. Except as provided in Section 5.2(a)
hereof and as provided below, merge or consolidate with or into any other
Person, or lease, sell or otherwise dispose of the stock of any Subsidiary
or of all or a substantial portion of the property, assets or business of
Borrower or a Subsidiary to any other Person. Except in the ordinary course
of business, Borrower shall not acquire and shall not permit any Subsidiary
to acquire any material part of the assets of any other business entity;
provided, however, that notwithstanding the foregoing, Borrower may, and
may allow any Subsidiary to, consummate the merger or acquisition of any
material part of the assets or the Capital Stock or equity of any other
business entity on the conditions that: (i) in the event of a merger,
Borrower or the Subsidiary is the legal surviving corporation; (ii) no
Default or Unmatured Default has occurred and is continuing at the time of
such merger or acquisition or will result or occur after the consummation
of such merger or acquisition; (iii) the Agent receives prior notice of all
material details of such merger or acquisition, and the entity or business
acquired is substantially in the same field or enterprise as presently
conducted by Borrower and its Subsidiaries; (iv) Borrower provides
satisfactory written evidence to the Agent that it is in compliance with
the financial covenants set forth in Section 5.3 hereof both immediately
before and after giving effect to the consummation of such merger or
acquisition; (v) the Agent receives satisfactory evidence that the board of
directors of the Target have approved the subject merger or acquisition or,
in the event the Target is in bankruptcy, the applicable
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CREDIT AGREEMENT PAGE 41
bankruptcy court has approved Borrower's or its Subsidiary's acquisition of
the Target; (vi) satisfactory evidence that the Leverage Ratio does not
exceed 1.00 to 1.00 immediately preceding the subject merger or
acquisition; (vii) the aggregate consideration (including the assumption of
any Indebtedness) for a subject merger or acquisition does not exceed
Twenty-Five Million Dollars ($25,000,000); (viii) satisfactory evidence
that the Leverage Ratio, calculated proforma giving effect to the subject
merger or acquisition, is at least .50 less than the maximum Leverage Ratio
then allowed under Section 5.3(b); and (ix) after giving effect to the
subject merger or acquisition, Borrower will have at least Ten Million
Dollars ($10,000,000) available to be borrowed under the Revolving
Commitments. Borrower will not, or will not permit any of its Subsidiaries
to, create or otherwise acquire any new Subsidiary except Borrower may
create Subsidiaries, having no material assets or operations, solely for
the purpose of facilitating acquisitions permitted hereunder, and Borrower
may create Subsidiaries in substantially the same fields of enterprise as
presently conducted by Borrower and its Subsidiaries if such Subsidiary
becomes a guarantor of the Obligations as required by Article 3 hereof.
Borrower will not, and will not permit any Subsidiary, to pursue any new
line of business.
(i) Change Name and Place of Business. Change its corporate name or
principal place of business, except on not less than sixty (60) days' prior
written notice to the Agent.
(j) Accounting Policies. Change its fiscal year or any of its
significant accounting policies, except to the extent necessary to comply
with GAAP and, with respect to a Target acquired pursuant to Section 5.2(h)
hereof, changes with respect to such Target to comply with Borrower's
accounting policies.
(k) Change of Business. Except as provided in Section 5.2(h) hereof or
as otherwise provided in this Agreement, make any material change in the
nature of its business as carried on at the date of this Agreement.
(l) Benefit Plans. Permit any condition to exist in connection with
any Employee Benefit Plan which might constitute grounds for the PBGC to
institute proceedings to have the Employee Benefit Plan terminated or a
trustee appointed to administer the Employee Benefit Plan; or engage in, or
permit to exist or occur any other condition, event or transaction, with
respect to any Employee Benefit Plan which could result in Borrower
incurring any material liability, fine or penalty.
(m) ESOP. With respect to the ESOP: (i) enter into any "prohibited
transaction" within the meaning of Section 4975(c) of the Code without the
consent of the Agent, which consent will not be unreasonably withheld
provided the "prohibited transaction" is exempted by Section 4975(d) of the
Code; (ii) permit any amendment or modification to the ESOP Plan that would
affect the ability of Borrower or any of the Subsidiaries to perform their
respective obligations under the Loan Documents or the ability of the
Lenders or the Agent to enforce the Obligations; and (iii) appoint a new
trustee of the ESOP without the written consent of the Agent.
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CREDIT AGREEMENT PAGE 42
(n) Transactions with Affiliates. Directly or indirectly enter into or
permit to exist any transaction (including, without limitation, the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of Borrower which is not its Subsidiary, on
terms that are less favorable to Borrower or any of its Subsidiaries, as
applicable, than those that might be obtained in an arm's length
transaction at the time from Persons who are not such a holder or
Affiliate.
(o) Sales and Leasebacks. Become liable, directly, by assumption or by
Contingent Obligation, with respect to any lease, whether an operating
lease, a synthetic lease or a Capitalized Lease, of any property (whether
real or personal or mixed) (i) which it or one of its Subsidiaries sold or
transferred or is to sell or transfer to any other Person, or (ii) which it
or one of its Subsidiaries intends to use for substantially the same
purposes as any other property which has been or is to be sold or
transferred by it or one of its Subsidiaries to any other Person in
connection with such lease.
(p) Corporate Documents. Amend, modify or otherwise change any of the
terms or provisions in any of their respective articles or certificates of
incorporation or by-laws as in effect on the date hereof in any manner
adverse to the interests of the Lenders, without the prior written consent
of the Required Lenders.
(q) Restrictive Agreements. Enter into any agreement (excluding any
restrictions existing under the Loan Documents) prohibiting (i) the
creation or assumption of any Lien on any of its properties or assets, (b)
the ability of Borrower to amend or otherwise modify this Agreement or any
other Loan Document, or (c) the ability of any Guarantor to make any
payments, directly or indirectly, to Borrower by way of dividends,
advances, repayments of loans or advances, reimbursements of management and
other intercompany charges, expenses and accruals or other returns on
investments, or any other agreement or arrangement which restricts the
ability of any such Guarantor to make any payment, directly or indirectly,
to Borrower.
Section 5.3 Financial Covenants.
(a) Consolidated Tangible Net Worth. At all times, maintain its
Consolidated Tangible Net Worth at not less than Twenty-Seven Million Eight
Hundred Seventy-Five Thousand Dollars ($27,875,000) as of December 31,
2001, and increasing as of March 31, 2002 by an amount equal to Fifty
Percent (50%) of Net Income before the cumulative effect of an accounting
change (without reduction for any net losses) for such fiscal quarter, and
thereafter increasing on the last day of each fiscal quarter by an amount
equal of Fifty Percent (50%) of Net Income (without reduction for any net
losses) for such fiscal quarter.
(b) Leverage Ratio. Maintain a Leverage Ratio of not greater than (i)
3.00 to 1.00 as of each fiscal quarter ending through and including
December 31, 2002, (ii) 2.75 to 1.00 as of March 31, 2003, June 30, 2003,
and September 30, 2003, and (iii) 2.50 to 1.00 as of December 31, 2003 and
as of each fiscal quarter end thereafter.
(c) Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage
Ratio of not less than (i) 1.20 to 1.00 as of each fiscal quarter ending
through and including September 30, 2003, and (ii) 1.25 to 1.00 as of
December 31, 2003 and as of each fiscal quarter end thereafter.
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ARTICLE 6. CONDITIONS PRECEDENT TO LOANS
Section 6.1 Conditions to Initial Advance. The obligation of the Lenders to
make the initial advance under the Facilities is subject to each of the
following conditions precedent:
(a) Authorization. Borrower shall have furnished to the Lenders, and
the Lenders shall have approved, certified copies of Borrower's and each
Guarantor's articles of incorporation and by-laws, both as amended,
accompanied by recent certificates of good standing issued by the Secretary
of State of their states of incorporation and those states in which
Borrower and the Guarantors own property or maintain an office and a
certified copy of resolutions adopted by each Board of Directors
authorizing the Facilities and the Guaranty, as applicable, and specifying
the names and capacities of those Persons authorized to execute the Loan
Documents.
(b) Loan Documents. Each of the Loan Documents shall have been
executed and delivered by Borrower to the Lenders.
(c) Guaranty. The Guaranty and the other applicable Loan Documents
shall have been executed and delivered by the Guarantors to the Lenders.
(d) Incumbency Certificates. The Lenders shall have received
Incumbency Certificates, executed by the respective Secretary or Assistant
Secretary of Borrower and each Guarantor which shall identify the name and
title and bear the signature of the officers of Borrower and such Guarantor
authorized to sign the Loan Documents, and the Lenders shall be entitled to
rely upon such certificates until informed of any change in writing by
Borrower.
(e) Opinions of Counsel. The Lenders shall have received a favorable
written opinion of counsel to Borrower and the Guarantors, dated of even
date herewith, in form and substance acceptable to the Lenders, including,
without limitation, such counsel's opinion that the Special Stock
Redemption is lawful under Delaware law. The Lenders shall have received a
favorable written opinion of counsel to Borrower as to the opinions as set
forth in Exhibit B to the Stock Purchase Agreement between the trustee of
the ESOP and Court Square Capital Limited dated February 19, 2002, in form
and substance acceptable to the Lenders.
(f) UCC Searches. The Lenders shall have received satisfactory return
after search in accordance with the Uniform Commercial Code or other
applicable law in such governmental offices as the Lenders shall have
deemed appropriate.
(g) Regulation U. The Lenders shall have received such certificates
and other documents as it shall have deemed reasonably appropriate as to
compliance with Regulations T, U and X of the Board of Governors of the
Federal Reserve System.
(h) Compliance Certificate. A fully executed and completed pro forma
Compliance Certificate, giving effect to the initial funding of the
Facilities, and consummation of the Special Stock Redemption and the ESOP
Loan as contemplated in this Agreement.
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CREDIT AGREEMENT PAGE 44
(i) Fees. The fees described in Section 2.6 shall have been paid by
Borrower to the Agent for the benefit of the Agent and the Lenders, as
applicable.
(j) Termination of Existing Credit Agreement. The Agent shall have
received evidence satisfactory to it that the commitments under the
Existing Credit Agreement have been terminated, all loans thereunder have
been repaid in full and all accrued fees and other amounts payable
thereunder have been paid in full.
(k) Insurance Certificate. The insurance certificate described in
Section 5.1(e).
(l) Repurchase Documents. The Agent shall have received and approved
the Repurchase Documents, the same shall have been duly executed by the
parties thereto, and the transactions contemplated by the Repurchase
Documents shall have been simultaneously consummated at a closing in
accordance with the terms thereof.
(m) Leverage Ratio. The Agent shall have received satisfactory
evidence that the Leverage Ratio is not greater than 2.65 to 1.0 as of the
date hereof.
(n) Additional Documentation. The Lenders shall have received such
other documents as the Lenders may reasonably request.
(o) Certificate of No Default. The Agent shall have received a
certificate, signed by an Authorized Officer of Borrower, stating that on
the date of the initial Advance, no Default or Unmatured Default has
occurred and is continuing.
(p) Valuation and Fairness Opinions. The Lenders shall have received
copies of: (i) the valuation/fairness opinion to be given by Duff & ▇▇▇▇▇▇
to GreatBanc Trust Company, as trustee of the ESOP, in accordance with the
provisions of the Repurchase Documents; and (ii) the fairness opinion to be
given by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ to Borrower in accordance with the
provisions of the Repurchase Documents.
Section 6.2 Conditions to Subsequent Advances. Prior to each subsequent
Advance under the Facilities:
(a) No Default. No Default or Unmatured Default shall have occurred
and be continuing.
(b) Representations and Warranties. Each representation and warranty
contained in Article 4 shall be true and correct as of the date of such
advance, except to the extent any such representation or warranty relates
solely to an earlier date and except changes reflecting transactions
permitted by this Agreement.
(c) Legal Matters. All legal matters incident to the making of such
Advance shall be reasonably satisfactory to the Lenders and its counsel.
(d) Expenses. Borrower shall have reimbursed the Agent for all legal
fees and other reasonable out-of-pocket expenses incurred by the Agent
after the date hereof in connection with the Facilities for which Borrower,
pursuant to this Agreement, is responsible.
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CREDIT AGREEMENT PAGE 45
Section 6.3 Special Conditions to Advances for Permitted Acquisitions.
Prior to any Advance to be used for the purpose of funding a permitted
acquisition or merger:
(a) Written Requests. At least Five (5) Banking Days prior to
Borrower's request for an Advance to be used for the purpose of funding a
permitted acquisition or merger pursuant to Section 5.2(h) hereof, Borrower
shall submit to the Agent and the Lenders a written request signed by an
Authorized Officer setting forth the estimated total amount of the
requested Advance and the proposed uses thereof. Borrower shall also submit
with its request (i) a written memorandum in summary form describing the
extent and material results of its due diligence with respect to the Person
to be acquired (the "Target"), (ii) copies of all annual financial
statements for the last three (3) years of the Target, or, to the extent
all such annual financial statements are not available, such other
financial statements reasonably acceptable in form to the Required Lenders,
(iii) a pro forma consolidated balance sheet of Borrower giving effect to
consummation of the proposed transaction, and (iv) a duly completed pro
forma Compliance Certificate required by Section 5.2(h) hereof and such
other information and materials as required by Section 5.2(h) hereof.
(b) Acquisition Documents. As soon as practicable, but in any event at
least Five (5) Banking Days prior to Borrower's request for an Advance to
be used for the purpose of funding a permitted acquisition or merger
pursuant to Section 5.2(h) hereof, Borrower shall provide the Agent with a
copy of the letter of intent or term sheet of the proposed acquisition or
merger. As soon as practicable, but in any event at least One (1) Banking
Day prior to the proposed date of funding of such Advance, the Agent shall
have received the definitive purchase agreement and such other material
acquisition documents governing the proposed acquisition of the Target. The
Agent shall furnish such items it receives under this Section to the
Lenders as soon as practicable.
(c) Representations of Target's Financial Statements. Borrower's
submission of the items in (a) hereof shall constitute a representation by
Borrower, to its actual knowledge, that (i) the information provided to the
Lenders with respect to the proposed acquisition remains true and correct
in all material respects as of the date of funding, (ii) no material
adverse change in the business of the Target (including the financial
condition and/or assets to be acquired), has occurred since the date of the
last financial statements furnished to the Lenders, and (iii) the Target
and Borrower (and its Subsidiaries, if applicable) have fully and timely
complied with any applicable laws in connection with the contemplated
acquisition.
(d) Expenses. Subject to Section 12.8 hereof, Borrower shall have
reimbursed the Agent for all reasonable legal fees and other reasonable
expenses incurred by the Agent after the date hereof in connection with the
Facilities.
Section 6.4 General. Each request for an Advance under the Facilities shall
constitute a representation and warranty by Borrower that the applicable
conditions contained in this Article 6 have been satisfied.
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ARTICLE 7. DEFAULT
The occurrence of any of the following events shall be deemed a Default
hereunder:
(a) any representation or warranty made by or on behalf of Borrower,
any Guarantor or any Affiliate to the Lenders under or in connection with
any Loan Document, any Guaranty, or any subordination agreement shall be
false in any material respect as of the date on which made;
(b) Borrower or any Guarantor fails to make any payment of principal
of or interest on any of the Notes, or any fee or other payment Obligation
within five (5) days after the same is due;
(c) the breach by Borrower of any of the covenants contained in
Section 5.1(b), Section 5.1(c), Section 5.1(d), Section 5.1(f), Section
5.1(g), Section 5.1(h), Section 5.1(i), Section 5.1(j), Section 5.1(k), or
Section 5.1(p) which breach remains uncured for ten (10) Banking Days after
written notice to Borrower; or the breach by Borrower of any other covenant
contained in Article 5 hereof;
(d) the breach by Borrower or any Guarantor of any other terms or
provisions of the Loan Documents (other than a breach which constitutes a
Default under (a), (b) or (c) above) which breach remains uncured for
thirty (30) days after written notice to Borrower;
(e) the failure of Borrower or any Guarantor to pay when due or within
any applicable grace or cure period any Indebtedness having an outstanding
principal balance, singly or in the aggregate, in excess of One Million
Dollars ($1,000,000), or the default by Borrower or any Guarantor in the
performance of any other term, provision or condition contained in any
agreement under which any such Indebtedness was created or is governed, the
effect of which is to permit the holder or holders of such Indebtedness to
cause such Indebtedness to become due prior to its stated maturity, unless
such default is waived in writing by the holder or holders of such
Indebtedness; or any such Indebtedness shall be validly declared to be due
and payable or required to be prepaid (other than by a regularly scheduled
payment) prior to the stated maturity thereof;
(f) Borrower or any Guarantor shall (i) have an order for relief
entered with respect to it under the Federal Bankruptcy Code, (ii) not pay,
or admit in writing its inability to pay, its debts generally as they
become due, (iii) make an assignment for the benefit of creditors, (iv)
apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for
it or any substantial part of its property, (v) institute any proceeding
seeking an order for relief under the Federal Bankruptcy Code or seeking to
adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed
against it, or (vi) suspend operations as presently conducted or
discontinue doing business as an ongoing concern;
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CREDIT AGREEMENT PAGE 47
(g) without the application, approval or consent of Borrower or any
Guarantor, a receiver, trustee, examiner, liquidator or similar official
shall be appointed for Borrower or such Guarantor or any substantial part
of its property, or a proceeding described in item (f) shall be instituted
against Borrower or such Guarantor and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a
period of sixty (60) consecutive days;
(h) any Guaranty or any material provision thereof shall cease to be
in full force or effect, or any Guarantor fails to promptly perform under
its Guaranty, or any Guarantor terminates or revokes or attempts to
terminate or revoke its Guaranty;
(i) any Governmental Authority shall condemn, seize or otherwise
appropriate, or take custody or control of all or any Substantial Portion
of the property of Borrower or its Subsidiaries;
(j) Borrower or any Subsidiary shall fail within thirty (30) days to
pay, bond or otherwise discharge any judgment or order for the payment of
money in an amount equal to or greater than Three Hundred Thousand Dollars
($300,000) which is not stayed on appeal or otherwise appropriately
contested in good faith, or any attachment, levy or garnishment is issued
against any property of Borrower or any Subsidiary;
(k) Any Change in Control shall occur;
(l) Borrower or any of its Subsidiaries shall be the subject of any
proceeding or investigation pertaining to (i) the Release by Borrower or
any of its Subsidiaries of any Contaminant into the environment, (ii) the
liability of Borrower or any of its Subsidiaries arising from the Release
by any other Person of any Contaminant into the environment, or (iii) any
violation of any Environmental Law which by Borrower or any of its
Subsidiaries, which, in any case, has or is reasonably likely to subject
Borrower to liability in excess of Five Million Dollars ($5,000,000);
(m) there occurs a "reportable event" or a "prohibited transaction"
under, or any complete or partial withdrawal from, or any other event which
would constitute grounds for termination of or the appointment of a trustee
to administer, any "plan" maintained by Borrower or any ERISA Affiliate for
the benefit of its "employees" (as such terms are defined in ERISA) which
will have a Material Adverse Effect;
(n) if (i) the ESOP is at any time revoked, rescinded, terminated or
ceases to be in full force and effect, or (ii) the ESOP permits any Lien on
any of its property in favor of any entity or person other than Borrower or
shall guarantee any indebtedness of any other entity or person or permit to
remain outstanding any unreimbursed indebtedness, except obligations for
benefit payments to the participants or beneficiaries of the ESOP, or (iii)
the ESOP enters into, or permits or suffers to exist, any "prohibited
transaction" within the meaning of Section 4975(c) of the Code which is not
exempted by Section 4975(c)(2) or (d) of the Code and as defined in Section
406 of ERISA which is not exempted by Section 408 of ERISA relating to the
ESOP Plan which is not cured or eliminated before the occurrence of any
material adverse effect on the ESOP, or (iv) the ESOP shall fail to make
any other payment of any other obligation when due;
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CREDIT AGREEMENT PAGE 48
(o) Any Collateral Document shall for any reason fail to create a
valid and perfected first priority security interest in any collateral
purported to be covered thereby, subject to Permitted Encumbrances and
except as permitted by the terms of any Collateral Document, or any
Collateral Document shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document, or Borrower or a Guarantor
shall fail to comply with any of the terms or provisions of any Collateral
Document subject to applicable cure or grace periods, if any; or
(p) Any change in the law concerning the method or timing of ESOP
distributions or relating to diversification of investments under the ESOP
if such change creates a Material Adverse Effect.
ARTICLE 8. REMEDY
Section 8.1 Acceleration. If any Default described in Article 7, item (f)0
or (g) occurs, the commitments of the Lenders to make, renew or convert Advances
of the Facilities, to accept drafts or to issue Letters of Credit hereunder
shall automatically terminate and the Obligations (including, without
limitation, the obligation to deposit with the Agent a sum equal to the
aggregate face amount of the outstanding Letters of Credit pursuant to Section
8.2 hereof) shall immediately become due and payable without any election or
action on the part of any Lender. If any other Default occurs, then upon the
declaration of the Required Lenders or the Agent at the direction of the
Required Lenders, the obligations of the Lenders to make, renew or convert
Advances of the Facilities, to accept drafts and to issue Letters of Credit
under this Agreement shall terminate and the Obligations (including, without
limitation, the obligation to deposit with the Agent a sum equal to the
aggregate face amount of the outstanding Letters of Credit pursuant to Section
8.2 hereof) shall immediately become due and payable. In either event, the
Obligations shall become immediately due and payable without presentment,
demand, protest or notice of any kind, all of which Borrower hereby expressly
waives. The remedies of the Lenders specified in this Agreement and the other
Loan Documents shall not be exclusive and the Lenders may avail themselves of
any of the remedies provided by law as well as any equitable remedies available
to the Lenders, and each and every remedy shall be cumulative and concurrent and
shall be in addition to every other remedy now or hereafter existing at law or
in equity.
Section 8.2 Deposit to Secure Reimbursement Obligations. When any Default
under (b) hereof has occurred and is continuing, or the Required Lenders (or the
Agent at the direction of the Required Lenders) have declared any acceleration
of the Obligations after the occurrence of any other Default, the Required
Lenders or the Agent at the direction of the Required Lenders may demand that
Borrower immediately pay to the Agent an amount equal to the aggregate
outstanding amount of the Letters of Credit and Borrower shall immediately upon
any such demand make such payment. Borrower hereby irrevocably grants to the
Agent for the benefit of the Lenders a security interest in all funds deposited
to the credit of or in transit to any deposit account or fund established
pursuant to this Section 8.2, including, without limitation, any investment of
such fund. Borrower hereby acknowledges and agrees that the Agent and the LC
Issuer would not have an adequate remedy at law for failure by Borrower to honor
any demand
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CREDIT AGREEMENT PAGE 49
made under this Section 8.2 and that the Agent and the LC Issuer shall have the
right to require Borrower specifically to perform its undertakings in this
Section 8.2 whether or not any draws have been made under any Letter of Credit.
In the event the Agent or the LC Issuer makes a demand pursuant to this Section
8.2, and Borrower makes the payment demanded, the Agent agrees to invest the
amount of such payment for the account of Borrower and at Borrower's risk and
direction in short-term investments acceptable to the Agent.
Section 8.3 Subrogation. The LC Issuer shall, to the extent of any payments
made by the LC Issuer under any Letter of Credit, be subrogated to all rights of
the beneficiary of such Letter of Credit as to all obligations of Borrower and
its Subsidiaries with respect to which such payment shall have been made by the
LC Issuer.
Section 8.4 Preservation of Rights. No delay or omission of the Agent or
any Lender to exercise any power or right under the Loan Documents shall impair
such power or right or be construed to be a waiver of any Default or an
acquiescence therein, and any single or partial exercise of any power or right
shall not preclude other or further exercise thereof or the exercise of any
other power or right. No Advance hereunder shall constitute a waiver of any of
the conditions of any Lender's obligation to make further Advances, nor, in the
event Borrower is unable to satisfy any such condition, shall a waiver of such
condition in any one instance have the effect of precluding any Lender from
thereafter declaring such inability to be a Default hereunder. No course of
dealings shall be binding upon the Agent or any Lender.
Section 8.5 Actions by the Agent/Default Rate. The Agent shall take such
action with respect to a Default or a Unmatured Default as shall be reasonably
directed in writing by the Required Lenders or all the Lenders, as applicable,
provided, however, that, unless and until the Agent shall have received such
direction, the Agent may take such action, or refrain from taking such action
with respect thereto, as it shall deem advisable in the best interests of the
Lenders. The Agent shall have no obligation to impose or collect the Default
rate of interest as provided in Section 2.2(c) hereof unless and until
instructed in writing by the Required Lenders, which written instruction shall
include the Required Lenders' determination of the date of Default and the
amount of interest due and payable by Borrower.
ARTICLE 9. THE AGENT
Section 9.1 Appointment; Nature of Relationship. National City is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
9. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (a) does not hereby assume any fiduciary
duties to any of the Lenders, (b) is a "representative" of the Lenders within
the meaning of the term "secured party" as defined in the Indiana Uniform
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CREDIT AGREEMENT PAGE 50
Commercial Code, as in effect from time to time, and (c) is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders hereby agrees to assert no claim against the Agent on any agency theory
or any other theory of liability for breach of fiduciary duty, all of which
claims each Lender hereby waives.
Section 9.2 Powers. The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
Section 9.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to Borrower, the Lenders or any
Lender for any action taken or omitted to be taken by it or them hereunder or
under any other Loan Document or in connection herewith or therewith except to
the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
Section 9.4 No Responsibility for Loans, Recitals, etc. Neither the Agent
nor any of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made in connection with any Loan Document or any
borrowing hereunder; (b) the performance or observance of any of the covenants
or agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article 6, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of Borrower or any Guarantor
of any of the Obligations or of any of Borrower's or any such Guarantor's
respective Subsidiaries. The Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by Borrower to the Agent at
such time, but is voluntarily furnished by Borrower to the Agent (either in its
capacity as Agent or in its individual capacity).
Section 9.5 Action on Instructions of Lenders. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
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CREDIT AGREEMENT PAGE 51
Section 9.6 Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
Section 9.7 Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
Section 9.8 Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Revolving Commitments (or, if the Revolving Commitments have been terminated, in
proportion to their Revolving Commitments immediately prior to such termination)
(a) for any amounts not reimbursed by Borrower for which the Agent is entitled
to reimbursement by Borrower under the Loan Documents, (b) for any other
expenses incurred by the Agent on behalf of the Lenders and not reimbursed by
Borrower in connection with the preparation, execution, delivery, administration
and enforcement of the Loan Documents (including, without limitation, for any
expenses incurred by the Agent in connection with any dispute between the Agent
and any Lender or between two or more of the Lenders), and (c) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent and not reimbursed by
Borrower in any way relating to or arising out of the Loan Documents or any
other document delivered in connection therewith or the transactions
contemplated thereby (including, without limitation, for any such amounts
incurred by or asserted against the Agent in connection with any dispute between
the Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that no Lender shall be liable for any of the foregoing to
the extent any of the foregoing is found in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the Agent. The obligations of the Lenders under this
Section 9.8 shall survive payment of the Obligations and termination of this
Agreement.
Section 9.9 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or Borrower
referring to this Agreement describing such Default or Unmatured Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give prompt notice thereof to the
Lenders.
Section 9.10 Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Revolving Commitment and its Loans as any Lender
and may exercise the same as though it were not the Agent, and the term "Lender"
or "Lenders" shall, at any time when the Agent is a
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CREDIT AGREEMENT PAGE 52
Lender, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent and its Affiliates may accept deposits from, lend
money to, and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement or any other
Loan Document, with Borrower or any of its Subsidiaries in which Borrower or
such Subsidiary is not restricted hereby from engaging with any other Person.
Section 9.11 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by Borrower and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
Section 9.12 Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders, with the written consent of
Borrower if no Default has occurred and is continuing, shall have the right to
appoint, on behalf of Borrower and the Lenders, a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders within
thirty (30) days after the resigning Agent's giving notice of its intention to
resign, then the resigning Agent may appoint, on behalf of Borrower and the
Lenders, a successor Agent. Notwithstanding the previous sentence, the Agent
may, with the written consent of Borrower if no Default has occurred and is
continuing, but without the consent of any Lender, appoint any of its Affiliates
which is a commercial bank as a successor Agent hereunder. If the Agent has
resigned or been removed and no successor Agent has been appointed, the Lenders
may perform all the duties of the Agent hereunder and Borrower shall, after
written notice thereof from the Lenders, make all payments in respect of the
Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained earnings
of at least One Hundred Million Dollars ($100,000,000). Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the resigning or removed Agent. Upon the effectiveness
of the resignation or removal of the Agent, the resigning or removed Agent shall
be discharged from its duties and obligations hereunder and under the Loan
Documents. After the effectiveness of the resignation or removal of an Agent,
the provisions of this Article 9 shall continue in effect for the benefit of
such Agent in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent hereunder and under the other Loan Documents. In the
event that there is a successor to the Agent by merger, or the Agent assigns its
duties and obligations to an Affiliate pursuant to this Section 9.12, then the
term "Prime Rate" as used in this Agreement shall mean the prime rate, base rate
or other analogous rate of the new Agent.
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Section 9.13 Delegation to Affiliates. Subject to Section 9.12 hereof,
Borrower and the Lenders agree that the Agent may delegate any of its duties
under this Agreement to any of its Affiliates. Any such Affiliate (and such
Affiliate's directors, officers, agents and employees) which performs duties in
connection with this Agreement shall be entitled to the same benefits of the
indemnification, waiver and other protective provisions to which the Agent is
entitled under Article 9 and Article 12 hereof.
Section 9.14 Execution of Collateral Documents. The Lenders hereby empower
and authorize the Agent to execute and deliver to Borrower and the Guarantors on
their behalf the Collateral Documents and any financing statements, agreements,
documents or instruments as shall be necessary or appropriate to effect the
purposes of the Loan Documents.
Section 9.15 Collateral Releases. The Lenders hereby empower and authorize
the Agent to execute and deliver to Borrower and the Guarantors on their behalf
any agreements, documents or instruments as shall be necessary or appropriate to
effect any releases of collateral as permitted by, but only in accordance with,
the terms of the applicable Loan Document (including a release of collateral
pursuant to Section 5.2(a) hereof and Section 8.17 of Borrower's Pledge and
Security Agreement) or which shall otherwise have been approved by the Lenders.
ARTICLE 10. SET OFF; RATABLE PAYMENTS
Section 10.1 Set off. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence of a Default, each Lender is hereby authorized at
any time or from time to time, without presentment, demand, protest or other
notice of any kind to Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other Indebtedness at any time held or
owing by such Lender or any affiliate of such Lender (including, without
limitation, by branches and agencies of such Lender or any affiliate of such
Lender wherever located) to or for the credit or the account of Borrower against
and on account of the Obligations and liabilities of Borrower to such Lender
under this Agreement or under any of the other Loan Documents, including,
without limitation, all interests in Obligations of Borrower purchased by such
Lender pursuant to Section 10.5 hereof, and all other claims of any nature or
description arising out of or connected with this Agreement or any other Loan,
irrespective of whether or not such Lender shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
Section 10.2 Ratable Payments. If any Lender, whether by set off or
otherwise, has payment made to it upon its Loans (other than payments received
pursuant to Section 2.5(f) or Section 2.5(g) or Section 12.20 in a greater
proportion than that received by any other Lender in terms of its Pro Rata
Share, such Lender agrees, promptly upon demand, to purchase a portion of the
Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans after taking into effect the aforementioned
payment and purchase. If any
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CREDIT AGREEMENT PAGE 54
Lender, whether in connection with set off or amounts which might be subject to
set off or otherwise, receives collateral or other protection for its
Obligations or such amounts which may be subject to set off, such Lender agrees,
promptly upon demand, to take such action necessary such that all Lenders share
in the benefits of such collateral ratably in proportion to their Loans. In case
any such payment is disturbed by legal process, or otherwise, appropriate
further adjustments shall be made.
Section 10.3 Ratable Benefit. All collateral from time to time securing the
Obligations shall exist for the ratable benefit of the Lenders. The interest of
each Lender in the collateral from time to time existing shall be pro rata
according to each Lender's Pro Rata Share of the outstanding principal
Obligations owing to the Lenders, but the interest of each Lender in the
collateral shall rank equally in priority with the interest of each other
Lender. Irrespective of the time, order or method of attachment or perfection of
the Lien, and irrespective of anything contained in any filing or agreement to
which any of the Lenders is a party, any Lien in favor of any of the Lenders in
any of the collateral described in the Loan Documents which arises out of any
prior or subsequent transaction shall be subordinate to the Lien in such
collateral in favor of the Lenders under the Loan Documents.
Section 10.4 Liquidation of Collateral. Subject to the provisions of
Section 8.1 and Article 9 and the further provisions of the Loan Documents, and
subject to the advice of its counsel, the Agent shall act with respect to the
collateral securing the Obligations under the Loan Documents as instructed by
the Required Lenders. No Lender will take any action to enforce its rights or
Liens against Borrower or its Subsidiaries (other than by way of set off),
except through the Agent.
Section 10.5 Adjustments. If any Lender (a "Benefitted Lender") shall at
any time receive any payment (other than regularly scheduled payments of
principal and interest prior to any Default) of all or any part of its
Facilities hereunder, or interest thereon (whether by set-off or otherwise) in a
greater proportion than its Pro Rata Share, such Benefitted Lender shall
purchase for cash from the other Lenders such portions of the other Lenders'
Notes, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause the
Benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with the other Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from the
Benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned to the extent of such recovery, but without interest. Borrower
agrees that each Lender so purchasing a portion of another Lender's Notes may
exercise all rights of payment (including, without limitation, rights of
set-off) with respect to such portion as fully as if such Lender were the direct
holder of such portion.
ARTICLE 11. BENEFIT OF AGREEMENT; ASSIGNMENT, PARTICIPATIONS
Section 11.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of Borrower and the
Lenders and their respective successors and assigns, except that (a) Borrower
shall not have the right to assign its rights or obligations under the Loan
Documents, and (b) any assignment by any Lender must be made in compliance with
Section 11.3 hereof. Notwithstanding clause (b) of this Section, any Lender
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CREDIT AGREEMENT PAGE 55
may at any time, without the consent of Borrower or the Agent, assign all or any
portion of its rights under this Agreement and any Note to a Federal Reserve
Bank; provided, however, that no such assignment to a Federal Reserve Bank shall
release the transferor Lender from its obligations hereunder. The Agent may
treat the Person which made any Loan or which holds any Note as the owner
thereof for all purposes hereof unless and until such Person complies with
Section 11.3 hereof in the case of an assignment thereof or, in the case of any
other transfer, a written notice of the transfer is filed with the Agent. Any
assignee or transferee of the rights to any Loan or any Note agrees by
acceptance of such transfer or assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Loan (whether or not a Note has been
issued in evidence thereof), shall be conclusive and binding on any subsequent
holder, transferee or assignee of the rights to such Loan.
Section 11.2 Participations.
(a) Permitted Participants; Effect. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants") participating
interests in any Loan owing to such Lender, any Note held by such Lender,
any Revolving Commitment of such Lender or any other interest of such
Lender under the Loan Documents. In the event of any such sale by a Lender
of participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the owner of its Loans and the holder
of any Note issued to it in evidence thereof for all purposes under the
Loan Documents, all amounts payable by Borrower under this Agreement shall
be determined as if such Lender had not sold such participating interests,
and Borrower and the Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under
the Loan Documents.
(b) Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or
waiver of any provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Loan or Revolving Commitment in
which such Participant has an interest which forgives principal, interest
or fees or reduces the interest rate or fees payable with respect to any
such Loan or Revolving Commitment, extends the Revolving Commitment Period,
postpones any date fixed for any regularly-scheduled payment of principal
of, or interest or fees on, any such Loan or Revolving Commitment, releases
any Guarantor of any such Loan or releases all or substantially all of the
collateral, if any, securing any such Loan.
(c) Benefit of Setoff. Borrower agrees that each Participant shall be
deemed to have the right of setoff provided in Section 10.1 hereof in
respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under the Loan Documents, provided
that each Lender shall retain the right of setoff provided in Section 10.1
hereof with respect to the amount of participating interests sold to each
Participant.
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CREDIT AGREEMENT PAGE 56
The Lenders agree to share with each Participant, and each Participant, by
exercising the right of setoff provided in Section 10.1 hereof, agrees to
share with each Lender, any amount received pursuant to the exercise of its
right of setoff, such amounts to be shared in accordance with Section 10.1
hereof as if each Participant were a Lender.
Section 11.3 Assignments.
(a) Permitted Assignments. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("Purchasers") all or any part of its rights and
obligations under the Loan Documents. Such assignment shall be substantially in
the form of Exhibit H or in such other form as may be agreed to by the parties
thereto. The consent of Borrower and the Agent shall be required prior to an
assignment becoming effective with respect to a Purchaser which is not a Lender
or an Affiliate thereof; provided, however, that if a Default has occurred and
is continuing, the consent of Borrower shall not be required. Such consents
shall not be unreasonably withheld or delayed. Each such assignment shall
(unless each of Borrower and the Agent otherwise consents) be in an amount not
less than the lesser of (i) Five Million Dollars ($5,000,0000 or (ii) the
remaining amount of the assigning Lender's Revolving Commitment (calculated as
at the date of such assignment).
(b) Effect; Effective Date. Upon (i) delivery to the Agent of an
assignment, together with any consents required by (a) hereof, and (ii) payment
of a Three Thousand Five Hundred Dollar ($3,500) fee to the Agent for processing
such assignment, such assignment shall become effective on the effective date
specified in such assignment. Such assignment shall contain a representation by
the Purchaser to the effect that none of the consideration used to make the
purchase of the Revolving Commitment and Loans under the applicable assignment
agreement are "plan assets" as defined under ERISA and that the rights and
interests of the Purchaser in and under the Loan Documents will not be "plan
assets" under ERISA. On and after the effective date of such assignment, such
Purchaser shall for all purposes be a Lender party to this Agreement and any
other Loan Document executed by or on behalf of the Lenders and shall have all
the rights and obligations of a Lender under the Loan Documents, to the same
extent as if it were an original party hereto, and no further consent or action
by Borrower, the Lenders or the Agent shall be required to release the
transferor Lender with respect to the percentage of the aggregate Revolving
Commitment and Loans assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this Section, the transferor Lender, the
Agent and Borrower shall, if the transferor Lender or the Purchaser desires that
its Loans be evidenced by Notes, make appropriate arrangements so that new Notes
or, as appropriate, replacement Notes are issued to such transferor Lender and
new Notes or, as appropriate, replacement Notes, are issued to such Purchaser,
in each case in principal amounts reflecting their respective Revolving
Commitments, as adjusted pursuant to such assignment.
Section 11.4 Dissemination of Information. Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of Borrower and its Subsidiaries; provided that
each Transferee and prospective Transferee agrees to be bound by Section 12.10
of this Agreement.
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CREDIT AGREEMENT PAGE 57
Section 11.5 Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 12.22 hereof.
ARTICLE 12. GENERAL PROVISIONS
Section 12.1 Waivers, Amendments and Remedies. No delay or omission of the
Lenders to exercise any right under the Loan Documents shall impair such right
or be construed to be a waiver of any Default or an acquiescence therein, and
any single or partial exercise of any such right shall not preclude other or
further exercise thereof or the exercise of any other right. No waiver,
amendment or other variation of the terms, conditions or provisions of the Loan
Documents whatsoever shall be valid unless in writing signed by the Required
Lenders, and, to the extent any rights or duties of the Agent may be affected
thereby, the Agent; provided, however, that no waiver, amendment, modification,
consent or other variation shall without consent of the Agent and each non
Defaulting Lender with Obligations being directly affected thereby (a) authorize
or permit the extension of time for paying the principal of, or interest on, the
Obligations, or any fees payable thereunder, or any reduction in the principal
amount thereof or a reduction in the rate of interest or fees thereon (other
than as a result of waiving the applicability of any increase in the applicable
interest rate upon Default or maturity), (b) amend (i) the respective
percentages of the Lenders' Revolving Commitments, (ii) the definition of
Required Lenders or the percentage of Lenders required to take or approve any
action hereunder, or (iii) the provisions of this Section 12.1 or Article 7 or
Section 8.1, (c) except as provided in this Agreement or in a Collateral
Document, release any collateral subject to any Loan Document, or release any
Guarantor from its Guaranty, or (d) waive, amend, or modify any other provision
of the Loan Documents which creates an obligation on the part of Borrower to
indemnify the Agent or any Lender or to pay money to the Agent or any Lender.
Any such waiver, amendment, modification or consent shall be effective only in
the specific instance and for the specific purpose for which given. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Lenders until the Obligations have been paid in full.
Section 12.2 Survival of Representations. All representations and
warranties of Borrower contained in the Loan Documents shall survive delivery of
the Notes and the making of the Facilities.
Section 12.3 Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, the Lenders shall not be obligated to extend
credit to Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
Section 12.4 Taxes. Any taxes (excluding taxation of the overall net income
of the Lenders) payable or ruled payable by any Governmental Authority in
respect of the Loan Documents shall be paid by Borrower, together with interest
and penalties, if any.
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CREDIT AGREEMENT PAGE 58
Section 12.5 Choice of Law. The Loan Documents (other than those containing
a contrary express choice of law provision) and the rights and obligations of
the parties thereunder and hereunder shall be governed by, and construed and
interpreted in accordance with the laws of the State of Indiana (but giving
effect to federal laws applicable to national Lenders), notwithstanding the fact
that Indiana conflict of law rules might otherwise require the substantive rules
of law of another jurisdiction to apply. Borrower hereby consents to the
jurisdiction of any state or federal court located within ▇▇▇▇▇▇ County,
Indiana. All service of process may be made by messenger, certified mail, return
receipt requested or by registered mail directed to Borrower at the addresses
indicated aside its signature to this Agreement, and Borrower otherwise waives
personal service of any and all process made upon Borrower. Borrower waives any
objection which Borrower may have to any proceeding commenced in a federal or
state court located within ▇▇▇▇▇▇ County, Indiana, based upon improper venue or
forum non conveniens. Nothing contained in this Section shall affect the right
of the Lenders to serve legal process in any other manner permitted by law or to
bring any action or proceeding against Borrower or its property in the courts of
any other jurisdiction.
Section 12.6 Headings. Section headings in the Loan Documents are for
convenience of reference only and shall not govern the interpretation of any of
the provisions of the Loan Documents.
Section 12.7 Entire Agreement. The Loan Documents embody the entire
agreement and understanding among Borrower, the Agent and the Lenders and
supersede all prior agreements and understandings among Borrower, the Agent and
the Lenders relating to the subject matter thereof.
Section 12.8 Expenses. Borrower shall reimburse the Agent for any and all
reasonable out-of-pocket expenses (including attorneys' fees for the Agent),
paid or incurred by the Agent in connection with the preparation, negotiation,
review, execution, delivery, amendment, modification and administration of the
Facilities and/or the Loan Documents. Borrower shall reimburse the Agent and the
Lenders for reasonable out-of-pocket expenses paid or incurred by the Lenders in
connection with charges incurred pursuant to Section 5.1(f) hereof after a
Default as provided therein. The Agent shall use its best effort to provide
advance notice to Borrower prior to the incurrence of such expenses. Borrower
shall reimburse the Agent and the Lenders for any and all reasonable costs,
charges and out-of-pocket expenses (including attorneys' fees and time charges
of attorneys for the Agent and the Lenders), paid or incurred by the Agent
and/or the Lenders in connection with the collection and enforcement of the
Facilities and/or the Loan Documents. The Lenders may pay or deduct from the
loan proceeds any of such expenses, and any proceeds so applied shall be deemed
to be advances under this Agreement evidenced by the Notes and secured by the
Loan Documents, and shall bear interest at the rate of interest provided in the
Notes.
Section 12.9 Indemnification. Borrower agrees to indemnify the Lenders, and
their successors and assigns (including any permitted purchaser of a
participation in the Facilities), and their directors, officers and employees,
against all losses, claims, costs, damages, liabilities and expenses, including,
without limitation, all expenses of litigation or preparation therefor (a
"Loss"), which they may pay or incur in connection with or arising out of the
direct or indirect application of the proceeds of the Facilities hereunder,
except for any Loss caused by the
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CREDIT AGREEMENT PAGE 59
Lenders' gross negligence or wilful misconduct. The indemnity set forth herein
shall be in addition to any other Obligations of Borrower to the Lenders
hereunder or at common law or otherwise, and shall survive any termination of
this Agreement, the expiration of the obligation of the Lenders to make the
Facilities and the payment of all Obligations.
Section 12.10 Confidentiality. The Lenders agree to treat all information
received by them in connection with the Loan Documents (except such information
which is generally available or has been made available to the public) as
confidential, provided, however, that nothing in this Section shall prohibit the
Lenders from, or subject the Lenders to liability for, disclosing any such
information to any Governmental Authority to whose jurisdiction the Lenders may
be subject, and provided further that the Lenders may provide such information
on a confidential basis to proposed purchasers of or participants in the
Facilities.
Section 12.11 Giving Notice. Any notice required or permitted to be given
under this Agreement may be, and shall be deemed effective if made in writing
and delivered to the recipient's address, telex number of facsimile number
addressed to Borrower at the address specified opposite its signature below, or
if addressed to the Agent or the Lenders at the addresses indicated on Schedule
I hereto, by any of the following means: (a) hand delivery, (b) United States
first class mail, postage prepaid, (c) registered or certified mail, postage
prepaid, with return receipt requested, (d) by a reputable rapid delivery
service, or (e) by telegraph or telex when delivered to the appropriate office
for transmission, charges prepaid, with request for assurance of receipt in a
manner typical with respect to communication of that type. Notice made in
accordance with this Section shall be deemed given upon receipt if delivered by
hand or wire transmission, three (3) Banking Days after mailing if mailed by
first class, registered or certified mail, or one (1) Banking Day after deposit
with an overnight courier service if delivered by overnight courier. Borrower,
the Agent and the Lenders may each change the address for service of notice upon
it by a notice in writing to the other parties hereto.
Section 12.12 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by
Borrower, the Agent and the Lenders.
Section 12.13 Incorporation by Reference. All Exhibits and Schedules hereto
are incorporated herein by this reference. Each of the other Loan Documents
shall be made subject to all of the terms, covenants, conditions, obligations,
stipulations and agreements contained in this Agreement to the same extent and
effect as if fully set forth therein, and this Agreement is made subject to all
of the terms, covenants, conditions, obligations, stipulations and agreements
contained in the other Loan Documents to the same extent and effect as if fully
set forth therein. The provisions of this Agreement, including, without
limitation, provisions relating to maintenance of insurance, are in addition to,
and not a limitation upon, the requirements of any other Loan Document, any
guaranty or any subordination agreement.
Section 12.14 Time of Essence. Time is of the essence under the Loan
Documents.
Section 12.15 No Joint Venture. Notwithstanding anything to the contrary
herein contained or implied, the Lenders, by this Agreement, or by any action
pursuant hereto, shall not be deemed to be a partner of, or a joint venturer
with, Borrower, and Borrower hereby indemnifies and agrees to defend and hold
the Lenders harmless, including the payment of reasonable attorneys' fees, from
any Loss resulting from any judicial construction of the parties' relationship
as such.
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CREDIT AGREEMENT PAGE 60
Section 12.16 Severability. In the event any provision of this Agreement or
any of the Loan Documents shall be held invalid or unenforceable by any court of
competent jurisdiction, such holding shall not affect the validity,
enforceability or legality of the remaining provisions hereof or thereof, all of
which shall continue unaffected and unimpaired thereby.
Section 12.17 Waiver of Setoff. Borrower agrees that it will not exercise
any right of setoff on any of the Notes or assert any claim for reduction or
credit against any of the Notes except when actual payment has been made.
Section 12.18 Gender. As used herein, the masculine gender shall be deemed
to include the feminine and the neuter and the singular number shall also
include the plural.
Section 12.19 Lenders Not in Control. None of the covenants or other
provisions contained in the Loan Documents shall, or shall be deemed to, give
the Lenders the rights or power to exercise control over the affairs and/or
management of Borrower, the power of the Lenders being limited to the right to
exercise the remedies provided in the Loan Documents, provided, however, that if
the Lenders become the owner of any stock or other equity interest in any
Person, whether through foreclosure or otherwise, the Lenders shall be entitled
(subject to requirements of law) to exercise such legal rights as they may have
by virtue of being the owner of such stock or other equity interest in such
Person.
Section 12.20 Additional Amounts Payable. If any change or the enactment,
adoption or judicial or administrative interpretation of any law, regulation,
treaty, guideline or directive (including, without limitation, Regulation D of
the Board of Governors of the Federal Reserve System) either (a) subjects any
Lender or any applicable Lending Installation or the LC Issuer to any additional
tax, duty, charge, deduction or withholding with respect to any of the
Facilities (other than a tax measured by the net or gross income of such
Lender), or (b) imposes or increases any reserve, special deposit or similar
requirement on account of any of the Facilities not otherwise provided in this
Agreement or (c) imposes increased minimum capital requirements on any Lender or
any applicable Lending Installation or the LC Issuer on account of its issuing
or maintaining any of the Facilities; and if any of the foregoing (i) results in
an increase to such Lender or the applicable Lending Installation or the LC
Issuer in the cost of issuing or maintaining any of the Facilities, or making
any payment on account of any of the Facilities, (ii) reduces the amount of any
payment receivable by such Lender or the applicable Lending Installation or the
LC Issuer under this Agreement with respect to any of the Facilities, (iii)
requires such Lender or the applicable Lending Installation or the LC Issuer to
make any payment calculated by reference to the gross amount of any sum received
or paid by such Lender or the applicable Lending Installation or the LC Issuer
pursuant to any of the Facilities, or (iv) reduces the rate of return on such
Lender's or the applicable Lending Installation or the LC Issuer's capital to a
level below that which such Lender or the applicable Lending Installation or the
LC Issuer could otherwise have achieved (taking into consideration such party's
policies with respect to Capital Adequacy), then Borrower shall pay to such
Lender or the applicable Lending Installation or the LC Issuer, as additional
compensation for the Facilities, such amounts as will compensate such Lender or
the applicable Lending Installation or the LC Issuer for such
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CREDIT AGREEMENT PAGE 61
increased cost, payment or reduction. Within twenty (20) days after (a) the
initial demand therefor and (b) presentation by a Lender of a certificate to
Borrower containing a statement of the cause of such increased cost, payment or
reduction and a calculation of the amount thereof (which statement and
calculation shall be presumed prima facie to be correct), Borrower shall pay the
additional amount payable measured from the date such change, enactment,
adoption or interpretation first affects such Lender or the applicable Lending
Installation or the LC Issuer.
Section 12.21 Application of Proceeds. Notwithstanding any contrary
provision of any other Loan Document, after the occurrence of a Default and
acceleration of the Obligations, including, without limitation, any proceeds of
collateral and recoveries under the Guaranty, shall be applied by the Agent to
payment of the Obligations in the following order:
(a) First, to payment of all reasonable costs and reasonable expenses
of the Agent and the Lenders incurred in connection with the preservation,
collection and enforcement of the Obligations;
(b) Second, to the payment of that portion of the Obligations
constituting accrued and unpaid interest and fees, pro rata among the
Lenders in accordance with their Pro Rata Shares;
(c) Third, to the payment of the principal amount of the Obligations,
pro rata among the Lenders in accordance with their Pro Rata Shares;
(d) Fourth, to the payment of any other Obligations not referred to
above to the Agent or any of the Lenders as may be properly payable; and
(e) Fifth, the balance, if any, after all the Obligations have been
satisfied, shall be returned to Borrower.
Section 12.22 Foreign Lender Withholding Tax. Each Lender represents and
warrants to the Agent that under applicable law and treaties no taxes are
required to be withheld by the Agent with respect to any payments to be made to
such Lender under this Agreement and further agrees to provide such required
United States tax forms or comparable statements to evidence its exemption from
withholding tax in accordance with applicable United States laws and
regulations, and agrees to comply from time to time with all applicable United
States laws and regulations with regard to such withholding tax exemptions.
Section 12.23 Replacement of Lenders. (a) (i) If any Lender becomes a
Defaulting Lender or otherwise defaults in its obligations to make Loans, (ii)
if any Lender refuses to consent to certain proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Lenders as provided in Section 12.1 hereof, or (iii)
upon a Lender charging to Borrower increased costs in excess of those being
generally charged by the other Lenders, Borrower shall have the right, in
accordance with the requirements of Section 11.3 hereof, if no Default will
exist after giving effect to such replacement, to replace such Lender (the
"Replaced Lender") with an Eligible Transferee or Eligible Transferees, none of
which shall constitute a Defaulting Lender at the time of replacement
(collectively, the "Replacement Lender"), reasonably acceptable to the Agent and
National City, provided that at the time of any replacement pursuant to this
Section, the Replacement Lender shall enter into one or more assignments as
provided in Section 11.3 hereof
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CREDIT AGREEMENT PAGE 62
pursuant to which the Replacement Lender shall acquire all the Revolving
Commitments and outstanding Loans of, and in each case participation in Letters
of Credit by, the Replaced Lender and, in connection therewith, shall pay to the
Replaced Lender in respect thereof an amount equal to the sum of (A) an amount
equal to the principal of, and all accrued interest on, all outstanding Loans of
the Replaced Lender and (B) an amount equal to all accrued, but theretofore
unpaid, fees owing to the Replaced Lender and (C) all obligations of Borrower
owing to the Replaced Lender (other than those specifically described in clause
(A) above in respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid in full to such Replaced Lender
concurrently with such replacement.
Section 12.24 Relationship of Parties; Mutual Release of Consequential
Damages. The relationship between Borrower and the Lenders and the Agent shall
be solely that of borrower and lender. Neither the Agent nor any Lender shall
have any fiduciary responsibilities to Borrower. Neither the Agent nor any
Lender undertakes any responsibility to Borrower to review or inform Borrower of
any matter in connection with any phase of Borrower's business or operations.
Neither the Agent, any Lender nor Borrower shall have any liability with respect
to, and Borrower, each Lender and the Agent hereby waives, releases and agrees
not to ▇▇▇ for, any special or consequential damages suffered by it in
connection with, arising out of, or in any way related to the Loan Documents or
the transactions contemplated thereby.
Section 12.25 Waiver of Jury Trial. THE LENDERS, THE AGENT AND BORROWER,
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY, INTENTIONALLY, UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY
RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF ANY OF THEM. NEITHER THE
LENDERS, THE AGENT NOR BORROWER SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR
OTHERWISE, ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS
SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY
EITHER THE LENDERS, THE AGENT OR BORROWER EXCEPT BY A WRITTEN INSTRUMENT
EXECUTED BY THE LENDERS, THE AGENT AND BORROWER. THIS PROVISION IS A MATERIAL
INDUCEMENT TO THE LENDERS TO PROVIDE THE FINANCING GOVERNED BY THIS AGREEMENT.
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CREDIT AGREEMENT PAGE 63
SIGNATURE PAGE OF
CHROMCRAFT REVINGTON, INC.
TO CREDIT AGREEMENT
"BORROWER"
CHROMCRAFT REVINGTON, INC.
By:______________________________
Its:______________________________
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
SIGNATURE PAGE OF
NATIONAL CITY BANK OF INDIANA
TO CREDIT AGREEMENT
NATIONAL CITY BANK OF INDIANA,
individually and as Agent
By:_____________________________
Its:____________________________
SIGNATURE PAGE OF
LASALLE BANK NATIONAL ASSOCIATION
TO CREDIT AGREEMENT
LASALLE BANK NATIONAL ASSOCIATION
By:__________________________
Its:_________________________
SIGNATURE PAGE OF
THE HUNTINGTON NATIONAL BANK
TO CREDIT AGREEMENT
THE HUNTINGTON NATIONAL BANK
By:___________________________
Its:__________________________
SIGNATURE PAGE OF
UNION PLANTERS BANK, NATIONAL ASSOCIATION
TO CREDIT AGREEMENT
UNION PLANTERS BANK,
NATIONAL ASSOCIATION
By:___________________________
Its:__________________________
SIGNATURE PAGE OF
KEYBANK NATIONAL ASSOCIATION
TO CREDIT AGREEMENT
KEYBANK NATIONAL ASSOCIATION
By:___________________________
Its:__________________________
SIGNATURE PAGE OF
THE NORTHERN TRUST COMPANY
TO CREDIT AGREEMENT
THE NORTHERN TRUST COMPANY
By:___________________________
Its:__________________________