EXHIBIT 10.1
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AMENDED AND RESTATED CREDIT AGREEMENT
dated as of March 31, 2004
by and among
ENERGY WEST, INCORPORATED,
VARIOUS FINANCIAL INSTITUTIONS
and
LASALLE BANK NATIONAL ASSOCIATION,
as Agent
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS........................................................1
1.1 Definitions......................................................1
1.2 Other Interpretive Provisions...................................19
SECTION 2. COMMITMENTS OF THE BANKS; BORROWING, CONVERSION AND
LETTER OF CREDIT PROCEDURES..........................................21
2.1 Commitments.....................................................21
2.2 Loan Procedures.................................................22
2.3 Letter of Credit Procedures.....................................24
2.4 Commitments Several.............................................26
2.5 Certain Conditions..............................................26
SECTION 3. NOTES EVIDENCING LOANS............................................26
3.1 Notes...........................................................26
3.2 Recordkeeping...................................................26
SECTION 4. INTEREST..........................................................27
4.1 Interest Rates..................................................27
4.2 Interest Payment Dates..........................................27
4.3 Setting and Notice of LIBOR.....................................27
4.4 Computation of Interest.........................................28
4.5 Maximum Rate of Interest........................................28
SECTION 5. FEES..............................................................28
5.1 Commitment Fee..................................................28
5.2 Letter of Credit Fees...........................................28
5.3 Upfront Fees....................................................29
5.4 Agent's Fees....................................................29
SECTION 6. REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT
AMOUNT; PREPAYMENTS..................................................29
6.1 Reduction or Termination of the Commitment Amount...............29
6.2 Prepayments.....................................................29
6.3 All Prepayments.................................................31
SECTION 7. MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES...................31
7.1 Making of Payments..............................................31
7.2 Application of Certain Payments.................................32
7.3 Due Date Extension..............................................32
7.4 Setoff..........................................................32
7.5 Proration of Payments...........................................32
7.6 Taxes...........................................................32
SECTION 8. INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS..........33
8.1 Increased Costs.................................................33
8.2 Basis for Determining Interest Rate Inadequate or Unfair........35
8.3 Changes in Law Rendering LIBOR Loans Unlawful...................35
8.4 Funding Losses..................................................36
8.5 Right of Banks to Fund through Other Offices....................36
8.6 Discretion of Banks as to Manner of Funding.....................36
8.7 Mitigation of Circumstances; Replacement of Banks...............36
8.8 Conclusiveness of Statements; Survival of Provisions............37
SECTION 9. WARRANTIES........................................................37
9.1 Organization....................................................37
9.2 Authorization; No Conflict......................................37
9.3 Validity and Binding Nature.....................................38
9.4 Financial Condition.............................................38
9.5 No Material Adverse Change......................................38
9.6 Litigation and Contingent Liabilities...........................38
9.7 Ownership of Properties; Liens..................................38
9.8 Subsidiaries....................................................38
9.9 Pension Plans...................................................39
9.10 Investment Company Act.........................................39
9.11 Public Utility Holding Company Act.............................39
9.12 Regulation U...................................................39
9.13 Taxes..........................................................39
9.14 Solvency, etc..................................................40
9.15 Environmental Matters..........................................40
9.16 Reserved.......................................................41
9.17 Insurance......................................................41
9.18 Real Property..................................................41
9.19 Information....................................................41
9.20 Intellectual Property..........................................42
9.21 Burdensome Obligations.........................................42
9.22 Labor Matters..................................................42
9.23 No Default.....................................................42
9.24 Foreign Assets Control Regulations and Anti-Money Laundering...42
9.25 Capitalization.................................................42
SECTION 10. COVENANTS........................................................43
10.1 Reports, Certificates and Other Information....................43
10.2 Books, Records and Inspections.................................46
10.3 Maintenance of Property; Insurance.............................46
10.4 Compliance with Laws; Payment of Taxes and Liabilities.........47
10.5 Maintenance of Existence, etc..................................47
10.6 Financial Covenants............................................48
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10.7 Limitations on Debt............................................48
10.8 Liens..........................................................49
10.9 Operating Leases...............................................50
10.10 Restricted Payments...........................................50
10.11 Mergers, Consolidations, Sales................................50
10.12 Modification of Organizational Documents......................50
10.13 Use of Proceeds...............................................51
10.14 Further Assurances............................................51
10.15 Transactions with Affiliates..................................51
10.16 Employee Benefit Plans........................................51
10.17 Environmental Matters.........................................51
10.18 Unconditional Purchase Obligations............................52
10.19 Inconsistent Agreements.......................................52
10.20 Business Activities...........................................52
10.21 Investments...................................................52
10.22 Restriction of Amendments to Certain Documents................53
10.23 Fiscal Year...................................................53
10.24 Cancellation of Debt..........................................53
10.25 Foreign Subsidiaries..........................................53
10.26 Refinancing of Pari Passu Debt................................53
10.27 Interest Rate Protection......................................51
10.28 OFAC, Etc.....................................................54
SECTION 11. EFFECTIVENESS; CONDITIONS OF LENDING, ETC........................54
11.1 Initial Credit Extension.......................................54
11.2 Conditions.....................................................57
SECTION 12. EVENTS OF DEFAULT AND THEIR EFFECT...............................58
12.1 Events of Default..............................................58
12.2 Effect of Event of Default.....................................61
12.3 Additional Remedies............................................62
12.4 Additional Remedies............................................63
12.5 Attorney-in-Fact...............................................65
12.6 No Marshaling..................................................65
SECTION 13. THE AGENT........................................................65
13.1 Appointment and Authorization..................................65
13.2 Delegation of Duties...........................................66
13.3 Liability of Agent.............................................66
13.4 Reliance by Agent..............................................66
13.5 Notice of Default..............................................67
13.6 Credit Decision................................................67
13.7 Indemnification................................................67
13.8 Agent in Individual Capacity...................................68
13.9 Successor Agent................................................68
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13.10 Collateral Matters............................................68
13.11 Funding Reliance..............................................69
SECTION 14. GENERAL..........................................................69
14.1 Waiver; Amendments.............................................69
14.2 Confirmations..................................................70
14.3 Notices........................................................70
14.4 Computations...................................................70
14.5 Regulation U...................................................71
14.6 Costs, Expenses and Taxes......................................71
14.7 Subsidiary References..........................................71
14.8 Captions.......................................................71
14.9 Assignments; Participations....................................71
14.10 Governing Law.................................................73
14.11 Counterparts..................................................73
14.12 Successors and Assigns........................................74
14.13 Indemnification by the Company................................74
14.14 Nonliability of Lenders.......................................74
14.15 FORUM SELECTION AND CONSENT TO JURISDICTION...................75
14.16 Waiver of Jury Trial..........................................75
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SCHEDULES
SCHEDULE 1.1(a) Existing Claims
SCHEDULE 2.1 Banks and Pro Rata Shares
SCHEDULE 3.3 Installments of Term Loans
SCHEDULE 9.5 Material Adverse Change
SCHEDULE 9.6 Litigation and Contingent Liabilities
SCHEDULE 9.8 Subsidiaries
SCHEDULE 9.15 Environmental Matters
SCHEDULE 9.17 Insurance
SCHEDULE 9.18 Real Property
SCHEDULE 9.22 Labor Matters
SCHEDULE 9.25 Capitalization
SCHEDULE 10.7 Permitted Existing Debt
SCHEDULE 10.8 Permitted Existing Liens
SCHEDULE 10.21 Investments
SCHEDULE 14.3 Addresses for Notices
EXHIBITS
EXHIBIT A Form of Note
EXHIBIT B Form of Compliance Certificate
EXHIBIT C Form of Borrowing Base Certificate
EXHIBIT D Form of Assignment Agreement
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of March 31, 2004 (this
"Agreement") is entered into by and among ENERGY WEST, INCORPORATED, a Montana
corporation (the "Company"), the financial institutions that are or may from
time to time become parties hereto (together with their respective successors
and assigns, the "Banks") and LASALLE BANK NATIONAL ASSOCIATION, a national
banking association (in its individual capacity, "LaSalle"), as agent for the
Banks (LaSalle, acting in its capacity as agent for the Banks hereunder and
under the other Loan Documents and any successor thereto in such capacity, the
"Agent").
WHEREAS, the Company, the Banks and the Agent are parties to a Credit
Agreement dated as of the Original Closing Date (as heretofore amended, modified
and supplemented, the "Original Credit Agreement"); and
WHEREAS, pursuant to this Agreement, the Company, the Agent and the Banks
desire to restructure and amend and restate in its entirety the Original Credit
Agreement, without constituting a novation.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties hereby amend and restate in its entirety
the Original Credit Agreement as follows:
SECTION 1. DEFINITIONS.
1.1 Definitions. When used herein the following terms shall have the
following meanings:
"Account Debtor" means any Person who is obligated to the Company or any
Subsidiary under an Account Receivable.
"Account Receivable" means, with respect to any Person, any right of such
Person to payment for goods sold or leased or for services rendered, whether or
not evidenced by an instrument or chattel paper and whether or not yet earned by
performance or invoiced.
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in: (i) the acquisition of
all or substantially all of the assets of a Person, or of all or substantially
all of any business or division of a Person, (ii) the acquisition of in excess
of fifty percent (50%) of the capital stock, partnership interests, membership
interests or equity of any Person, or otherwise causing any Person to become a
Subsidiary, or (iii) a merger or consolidation or any other combination with
another Person (other than a Person that is a Subsidiary to the extent otherwise
permitted hereunder).
"Affected Loan" has the meaning ascribed thereto in Section 8.3.
"Affiliate" of any Person means: (i) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person and (ii) any officer or director of such Person. A Person shall be deemed
to be "controlled by" any other Person if such Person possesses, directly or
indirectly, power to vote five percent (5%) or more of the securities (on a
fully-diluted, as-exercised basis) having ordinary voting power for the election
of directors or managers or power to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise..
"Agreement" has the meaning ascribed thereto in the Preamble.
"Appraisal" means that certain Appraisal dated as of August 22, 2003
prepared and delivered by Hilco with respect to the property, plant and
equipment of the Company and its Subsidiaries, a certified, true, correct and
complete copy of which has been delivered by the Company to Agent.
"Approved Fund" means any Fund that is administered or managed by (a)
LaSalle, (b) any Affiliate of LaSalle or (c) an entity or an Affiliate of an
entity that administers or manages LaSalle.
"Asset Sale" means the sale, lease, assignment or other transfer for value
(each a "Disposition") by the Company or any Subsidiary to any Person (other
than the Company or any Subsidiary) of any Collateral other than: (i) the
Disposition of any asset which is to be replaced, and is in fact replaced,
within thirty (30) days with another asset performing the same or a similar
function and (ii) the sale or lease of inventory in the ordinary course of
business.
"Assignment Agreement" has the meaning ascribed thereto in Section 14.9.1.
"Attorney Costs" means, with respect to any Person, all reasonable fees and
charges of any counsel to such Person, the reasonable allocable cost of internal
legal services of such Person, all reasonable disbursements of such internal
counsel and all court costs and similar legal expenses.
"Bank" has the meaning ascribed thereto in the Preamble. References to the
"Banks" shall include the Issuing Bank; for purposes of clarification only, to
the extent that LaSalle (or any successor Issuing Bank) may have any rights or
obligations in addition to those of the other Banks due to its status as Issuing
Bank, its status as such will be specifically referenced.
"Bank Party" has the meaning ascribed thereto in Section 14.13.
"Banking Costs" means the actual amount of fees, costs and expenses paid by
the Company and its Subsidiaries with respect to the preparation, negotiation
and delivery of loan documentation with ▇▇▇▇▇ Fargo Bank Montana, National
Association; provided, however, for the Fiscal Quarter ending on June 30, 2003,
such amount shall not exceed $260,852, for the Fiscal Quarter ending September
30, 2003 such amount shall not exceed $193,186, and, for each Fiscal Quarter
ending thereafter, an amount approved by Agent and the Banks in their sole
discretion.
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"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. ss.101, et seq.), as amended and in effect from time to time, any
successor thereto and the regulations issued from time to time thereunder.
"Base Rate" means, at any time, the rate of interest in effect for such day
as publicly announced from time to time by LaSalle as its "prime rate" (whether
or not such rate is actually charged by LaSalle). Any change in the Base Rate
(or such "prime rate," as the case may be) announced by LaSalle shall take
effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loan" means any Loan which bears interest at or by reference to
the Base Rate.
"Base Rate Margin" means: (i) with respect to Term Loan A, one and one half
percent (1.50%) per annum; (ii) with respect to Term Loan B: (A) from the
Restatement Effective Date through June 30, 2004, one percent (1.00%) per annum;
and (B) thereafter, two percent (2.00%) per annum; and (iii) with respect to
Revolving Loans, zero percent (0.00%) per annum.
"Borrowing Base" means an amount equal to the total of: (i) eighty percent
(80%) of the unpaid amount (net of such reserves and allowances as the Agent
deems necessary in its reasonable discretion) of all Eligible Accounts
Receivable plus (ii) seventy percent (70%) of the value of all Eligible
Inventory valued at the lower of cost or market (net of such reserves and
allowances as the Agent deems necessary in its reasonable discretion) plus (iii)
in the sole discretion of Agent and the Banks, only to the extent: (y) it is
subject to a perfected Lien in favor of the Agent and (z) it is not subject to
any other assignment, claim or Lien, other than Liens securing only the Pari
Passu Debt otherwise permitted hereunder, eighty percent (80%) of the value of:
(A) the property, plant and equipment of the Company and its Subsidiaries, as
set forth in the Appraisal less (B) all such property, plant and equipment which
has been sold, leased, assigned, otherwise transferred, lost, materially
damaged, destroyed or with respect to which an event has occurred which may give
rise to the issuance of Property Loss Proceeds less (C) all depreciation which
has been attributed to such property, plant and equipment after the date of the
Appraisal by the Company, its Subsidiaries, any of their respective accountants,
agents or representatives or any governmental authority (or which, in the
reasonable discretion of Agent, should have been so depreciated) plus (D) eighty
percent (80%) of the Capital Expenditures made to maintain or replace the
property, plant and equipment of the Company and its Subsidiaries covered by the
Appraisal.
"Borrowing Base Certificate" means a certificate substantially in the form
of Exhibit C.
"Business Day" means any day on which LaSalle is open for commercial
banking business in Chicago, Illinois and, in the case of a Business Day which
relates to a LIBOR Loan, on which dealings are carried on in the London
interbank eurodollar market.
"Capital" means, as of any date of determination thereof, without
duplication, the sum of: (i) Consolidated Net Worth plus (ii) all Debt.
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"Capital Expenditures" means all expenditures for property, plant and
equipment of the Company and its Subsidiaries which, in accordance with GAAP,
would be required to be capitalized and shown on the consolidated balance sheet
of the Company, but excluding expenditures made in connection with the
replacement, substitution or restoration of assets to the extent financed: (i)
from insurance proceeds (or other similar recoveries) paid on account of the
loss of or damage to the assets being replaced or restored or (ii) with awards
of compensation arising from the taking by eminent domain or condemnation of the
assets being replaced.
"Capital Lease" means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.
"Cash Collateralize" means to deliver cash collateral to the Agent, to be
held as cash collateral for outstanding Letters of Credit, pursuant to
documentation reasonably satisfactory to the Agent. Derivatives of such term
have corresponding meanings.
"Cash Equivalent Investment" means, at any time: (i) any evidence of Debt,
maturing not more than one year after such time, issued or guaranteed by the
United States Government or any agency thereof, (ii) commercial paper, maturing
not more than one (1) year from the date of issue, or corporate demand notes, in
each case (unless issued by a Bank or its holding company) rated at least A-l by
Standard & Poor's Ratings Group or P-l by ▇▇▇▇▇'▇ Investors Service, Inc., (iii)
any certificate of deposit (or time deposits represented by such certificates of
deposit) or banker's acceptance, maturing not more than one year after such
time, or overnight Federal Funds transactions that are issued or sold by any
Bank or its holding company or by a commercial banking institution that is a
member of the Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000 and (iv) any repurchase
agreement entered into with any Bank (or other commercial banking institution of
the stature referred to in clause (iii)) which: (y) is secured by a fully
perfected security interest in any obligation of the type described in any of
clauses (i) through (iii) and (z) has a market value at the time such repurchase
agreement is entered into of not less than one hundred percent (100%) of the
repurchase obligation of such Bank (or other commercial banking institution)
thereunder.
"CERCLA" has the meaning ascribed thereto in Section 9.15.
"Code" means the Internal Revenue Code of 1986.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by the Company or any other Person
(including, without limitation, any other Loan Party) as debtor and their
respective Subsidiaries in or upon which a Lien now or hereafter exists in favor
of the Agent, for the benefit of the Banks, or any Bank, whether under or with
respect to Obligations arising under this Agreement or any other Loan Document,
any Hedging Agreement or any other agreement or document executed by any such
Persons and delivered to the Agent.
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"Collateral Access Agreement" means an agreement in form and substance
reasonably satisfactory to the Agent pursuant to which a mortgagee or lessor of
real property on which personal property and/or fixtures are stored or otherwise
located, or a warehouseman, processor or other bailee of Inventory, acknowledges
the Liens of the Agent and waives or subordinates any Liens held by such Person
on such property, and, in the case of any such agreement with a mortgagee or
lessor, permits the Agent access to and use of such real property for a
reasonable amount of time following the occurrence and during the continuance of
an Event of Default to assemble, complete and sell any personal property and/or
fixtures stored or otherwise located thereon.
"Collateral Documents" means each agreement, document or instrument
executed concurrently herewith or with the Original Agreement or at any time
thereafter, or hereafter, as the case may be, pursuant to which one (1) or more
Loan Parties or any other Person either: (i) guarantees payment or performance
of all or any portion of the Obligations, including, without limitation, the
Guaranty and/or (ii) provides, as security for all or any portion of the
Obligations, a Lien on any of its assets in favor of Agent for its own benefit
and the benefit of the Banks, as any or all of the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Commitment" means, as to any Bank, such Bank's commitment to make
Revolving Loans, and to issue or participate in Letters of Credit, under this
Agreement. The initial amount of each Bank's Pro Rata Share of the Revolving
Commitment Amount and of the aggregate amount of the Term Loans is set forth on
Schedule 2.1.
"Commitment Fee Rate" means a rate of interest equal to 7/20 of one percent
(0.35%) per annum.
"Company" has the meaning ascribed thereto in the Preamble.
"Computation Period" means each period of four (4) consecutive Fiscal
Quarters ending on the last day of a Fiscal Quarter.
"Consolidated Net Income" means, with respect to the Company and its
Subsidiaries for any period, the net income (or loss) of the Company and its
Subsidiaries for such period, excluding any gains from Asset Sales, any
extraordinary gains and any gains from discontinued operations.
"Consolidated Net Worth" means, as of any time the same is to be
determined, the total shareholders' equity (including capital stock, additional
paid-in-capital and retained earnings after deducting treasury stock, but
excluding (to the extent otherwise included in calculating shareholders'
equity), minority interests in Subsidiaries) which would appear on the
consolidated balance sheet of the Company determined on a consolidated basis in
accordance with GAAP.
"Controlled Group" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Company, are treated
as a single employer under Section 414 of the Code or Section 4001 of ERISA.
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"Debt" of any Person means, without duplication: (i) all indebtedness of
such Person for borrowed money, whether or not evidenced by bonds, debentures,
notes or similar instruments, (ii) all obligations of such Person as lessee
under Capital Leases which have been or should be recorded as liabilities on a
balance sheet of such Person in accordance with GAAP, (iii) all obligations of
such Person to pay the deferred purchase price of property or services
(excluding trade accounts payable in the ordinary course of business), (iv) all
indebtedness secured by a Lien on the property of such Person, whether or not
such indebtedness shall have been assumed by such Person, (v) all obligations,
contingent or otherwise, with respect to the face amount of all letters of
credit (whether or not drawn) and banker's acceptances issued for the account of
such Person (including the Letters of Credit), (vi) all Hedging Obligations of
such Person, (vii) all Suretyship Liabilities of such Person and (viii) all Debt
of any partnership of which such Person is a general partner.
"Disposal" has the meaning ascribed thereto in the definition of "Release."
"Dollar" and the sign "$" mean lawful money of the United States of
America.
"EBITDA" means, for any period, Consolidated Net Income for such period
plus, to the extent deducted in determining such Consolidated Net Income: (i)
Interest Expense, (ii) income tax expense, depreciation and amortization for
such period, (iii) the PPLM Legal Fees for such period, (iv) Banking Costs for
such period and (v) Proxy Contest Costs for such period.
"Eligible Account Receivable" means an Account Receivable owing to the
Company or any Subsidiary which meets each of the following requirements:
(1) it arises from the sale of goods or the rendering of services by
the Company or the applicable Subsidiary; and if it arises from the sale of
goods: (i) such goods comply with such Account Debtor's specifications (if
any) and have been delivered to such Account Debtor and (ii) the Company or
the applicable Subsidiary has possession of, or if requested by the Agent
has delivered to the Agent, written evidence of such delivery (which may
include a "master meter reading" and does not need to be on a
consumer-by-consumer basis);
(2) it: (i) is subject to a perfected Lien in favor of the Agent and
(ii) is not subject to any other assignment, claim or Lien, other than
Liens securing only the Pari Passu Debt otherwise permitted hereunder;
(3) it is a valid, legally enforceable and unconditional obligation
of the Account Debtor with respect thereto, and is not subject to any
counterclaim, credit, allowance, discount, rebate or adjustment by the
Account Debtor with respect thereto, or to any claim by such Account Debtor
denying liability thereunder in whole or in part;
(4) there is no bankruptcy, insolvency or liquidation proceeding by
or against the Account Debtor with respect thereto;
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(5) the Account Debtor with respect thereto is a resident or citizen
of, and is located within, the United States, unless the sale of goods or
services giving rise to such Account Receivable is on letter of credit,
banker's acceptance or other credit support terms reasonably satisfactory
to the Agent;
(6) it is not an Account Receivable arising from a "sale on
approval," "sale or return," "consignment" or "▇▇▇▇ and hold" or subject to
any other repurchase or similar agreement;
(7) it is not an Account Receivable with respect to which possession
and/or control of the goods sold giving rise thereto is held, maintained or
retained by the Company or any Subsidiary (or by any agent or custodian of
the Company or any Subsidiary) for the account of or subject to further
and/or future direction from the Account Debtor with respect thereto;
(8) it arises in the ordinary course of business of the Company or
the applicable Subsidiary;
(9) if the Account Debtor is the United States or any department,
agency or instrumentality thereof, the Company or the applicable Subsidiary
has assigned its right to payment of such Account Receivable to the Agent
pursuant to the Assignment of Claims Act of 1940;
(10) if the Company maintains a credit limit for an Account Debtor,
the aggregate dollar amount of Accounts Receivable due from such Account
Debtor, including such Account Receivable, does not exceed such credit
limit;
(11) if the Account Receivable is evidenced by chattel paper or an
instrument, the originals of such chattel paper or instrument shall have
been endorsed and/or assigned and delivered to the Agent in a manner
satisfactory to the Agent;
(12) such Account Receivable is not more than: (i) sixty (60) days
past the due date thereof or (ii) ninety (90) days past the original
invoice date thereof, in each case according to the original terms of sale;
(13) it is not an Account Receivable with respect to an Account Debtor
that is located in any jurisdiction which has adopted a statute or other
requirement with respect to which any Person that obtains business from
within such jurisdiction must file a notice of business activities report
or make any other required filings in a timely manner in order to enforce
its claims in such jurisdiction's courts unless such notice of business
activities report has been duly and timely filed or the Company or the
applicable Subsidiary is exempt from filing such report and has provided
the Agent with satisfactory evidence of such exemption;
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(14) the Account Debtor with respect thereto is not the Company or an
Affiliate of the Company or any Subsidiary;
(15) it is not owed by an Account Debtor with respect to which twenty
five percent (25%) or more of the aggregate amount of outstanding Accounts
Receivable owed at such time by such Account Debtor is classified as
ineligible under clause (12) of this definition; and
(16) if the aggregate amount of all Accounts Receivable owed by the
Account Debtor thereon exceeds twenty five percent (25%) of the aggregate
amount of all Accounts Receivable at such time, then all Accounts
Receivable owed by such Account Debtor in excess of such amount shall be
deemed ineligible.
An Account Receivable which is at any time an Eligible Account Receivable, but
which subsequently fails to meet any of the foregoing requirements, shall
forthwith cease to be an Eligible Account Receivable. Further, with respect to
any Account Receivable, if the Agent or the Required Banks at any time hereafter
determine in their discretion that the prospect of payment or performance by the
Account Debtor with respect thereto is materially impaired for any reason
whatsoever, such Account Receivable shall cease to be an Eligible Account
Receivable after notice of such determination is given to the Company.
"Eligible Inventory" means Inventory of the Company or any Subsidiary which
meets each of the following requirements:
(1) it: (i) is subject to a perfected Lien in favor of the Agent and
(ii) is not subject to any other assignment, claim or Lien, other than
Liens securing only the Pari Passu Debt otherwise specifically permitted
hereunder;
(2) it is salable;
(3) it is in the possession and control of the Company or any
Subsidiary and it is stored and held in facilities owned by the Company or
any Subsidiary or, if such facilities are not so owned, the Agent is in
possession of a Collateral Access Agreement with respect thereto;
(4) it is not Inventory produced in violation of the Fair Labor
Standards Act and subject to the "hot goods" provisions contained in Title
29 U.S.C. ss.215;
(5) it is not subject to any agreement which would restrict the
Agent's ability to sell or otherwise dispose of such Inventory;
(6) it is located in the United States or in any territory or
possession of the United States that has adopted Article 9 of the UCC;
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(7) it is not "in transit" to the Company or any Subsidiary or held
by the Company or any Subsidiary on consignment; and
(8) the Agent shall not have determined in its discretion that it is
unacceptable due to age, type, category, quality, quantity and/or any other
reason whatsoever.
Inventory which is at any time Eligible Inventory but which subsequently fails
to meet any of the foregoing requirements shall forthwith cease to be Eligible
Inventory.
"Environmental Claims" means all claims, however asserted, by any
governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law or
for release or injury to the environment.
"Environmental Laws" means all present or future federal, state or local
laws, statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any governmental authority,
in each case relating to Environmental Matters.
"Environmental Matters" means any matter arising out of or relating to
pollution or protection of the environment, including any of the foregoing
relating to the presence, use, production, generation, handling, transport,
treatment, storage, disposal, distribution, discharge, release, control or
cleanup of any Hazardous Substance.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder.
"Event of Default" means the occurrence of any of the events described in
Section 12.1.
"Event of Loss" means, with respect to any Property, any of the following;
(a) any loss, destruction or damage of such Property; (b) any pending or
threatened institution of any proceedings for the condemnation or seizures of
such Property or for the exercise of any right of eminent domain; or (c) any
actual condemnation, seizure or taking, by exercise of the power of eminent
domain or otherwise, of such Property, or confiscation of such Property or
requisition of the use of such Property.
"Existing Claims" means the claims, causes of action and other judicial
proceedings made, brought, filed or levied by or on behalf of the Company, any
of its Subsidiaries or any Joint Venture on or before the Original Closing Date,
each of which is described in reasonable detail on Schedule 1.1(a) hereto.
"Existing Loans" has the meaning ascribed thereto in Section 2.
"Federal Funds Rate" means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of
9
New York (including any such successor publication, "H.15(519)") on the
preceding Business Day opposite the caption "Federal Funds (Effective)"; or, if
for any relevant day such rate is not so published on any such preceding
Business Day, the rate for such day will be the arithmetic mean as determined by
the Agent of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 A.M. (New York City time) on that day by each of three
leading brokers of Federal funds transactions in New York City selected by the
Agent.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of the Company and its Subsidiaries,
which period shall be the twelve (12) month period ending on June 30 of each
year. References to a Fiscal Year with a number corresponding to any calendar
year (e.g., "Fiscal Year 2003") refer to the Fiscal Year ending on June 30 of
such calendar year.
"FRB" means the Board of Governors of the Federal Reserve System or any
successor thereto.
"Fund" means any Person (other than a natural Person) that is (or will be)
engaged in the making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Group" has the meaning ascribed thereto in Section 2.2.1.
"Guaranty" means that certain Amended and Restated Guaranty dated as of the
Restatement Effective Date executed by each Subsidiary of the Company in favor
of Agent for its own benefit and the benefit of each Bank, which is in form and
substance satisfactory to Agent.
"Hazardous Substances" has the meaning ascribed thereto in Section 9.15.
"Hedging Agreement" means any interest rate, currency or commodity swap
agreement, cap agreement or collar agreement, and any other agreement or
arrangement designed to protect a Person against fluctuations in interest rates,
currency exchange rates or commodity prices.
"Hedging Obligation" means, with respect to any Person, any liability of
such Person under any Hedging Agreement.
10
"Interest Coverage Ratio" means, for any Computation Period, the ratio of:
(i) EBITDA for such Computation Period to (ii) Interest Expense for such
Computation Period.
"Interest Expense" means for any period the consolidated interest expense
of the Company and its Subsidiaries for such period (including all imputed
interest on Capital Leases).
"Interest Period" means, as to any LIBOR Loan, the period commencing on the
date such Loan is borrowed or continued as, or converted into, a LIBOR Loan and
ending on the date one (1), two (2), three (3) or six (6) months thereafter as
selected by the Company pursuant to Section 2.2.2 or 2.2.3 (or such other longer
period as may be agreed upon from time to time by Company and Agent, at Agent's
sole discretion), as the case may be; provided that:
(i) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be
extended to the following Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on
the preceding Business Day;
(ii) any Interest Period that begins on a day for which
there is no numerically corresponding day in the calendar month
at the end of such Interest Period shall end on the last Business
Day of the calendar month at the end of such Interest Period; and
(iii)the Company may not select any Interest Period for a
Loan which would extend beyond the Termination Date or Revolving
Termination Date (as applicable) with respect to such Loan.
"Inventory" has the meaning assigned to such term in the UCC as in effect
in the State of Illinois from time to time.
"Investment" means, relative to any Person, any investment in another
Person, whether by acquisition of any debt or equity security, by making any
loan or advance or by becoming obligated with respect to a Suretyship Liability
in respect of obligations of such other Person.
"Issuing Bank" means LaSalle in its capacity as the issuer of Letters of
Credit hereunder and its successors and assigns in such capacity.
"Joint Venture" means any partnership, association, company, community of
interest, business arrangement or joint venture entered into by the Company or
any of its Subsidiaries, in the ordinary course of their business, with an
unrelated, non-Affiliate third party on an arm's length basis to engage in a
joint undertaking.
"LaSalle" has the meaning ascribed thereto in the Preamble.
11
"L/C Application" means, with respect to any request for the issuance of a
Letter of Credit, a letter of credit application in the form being used by the
Issuing Bank at the time of such request for the type of letter of credit
requested.
"L/C LaSalle Master Letter of Credit Agreement" means a master letter of
credit agreement in the form attached hereto as Exhibit E.
"L/C Fee Rate" means a rate of interest equal to two and one half percent
(2.50%) per annum.
"Letter of Credit" has the meaning ascribed thereto in Section 2.1.3.
"LIBOR" means a rate of interest equal to the per annum rate of interest at
which United States Dollar deposits in an amount comparable to the principal
balance of the applicable Loan and for a period equal to the relevant Interest
Period are offered in the London Interbank Eurodollar market at 11:00 a.m.
(London time) two (2) Business Days prior to the commencement of each Interest
Period, as displayed in the Bloomberg Financial Markets system, or other
authoritative source selected by Agent in its sole discretion, divided by a
number determined by subtracting from one (1.00) the maximum reserve percentage
for determining reserves to be maintained by member banks of the Federal Reserve
System for Eurocurrency liabilities, such rate to remain fixed for such Interest
Period. Agent's determination of LIBOR shall be conclusive, absent manifest
error.
"LIBOR Loan" means any Loan which bears interest at a rate determined by
reference to LIBOR (Reserve Adjusted).
"LIBOR Margin" means: (i) with respect to Term Loan A, three and one half
percent (3.50%) per annum; and (ii) with respect to Revolving Loans, two and one
half percent (2.50%) per annum.
"LIBOR Office" means with respect to any Bank the office or offices of such
Bank which shall be making or maintaining the LIBOR Loans of such Bank
hereunder. A LIBOR Office of any Bank may be, at the option of such Bank, either
a domestic or foreign office.
"Lien" means, with respect to any Person, any interest granted by such
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise, and any contingent or other agreement to
provide any of the foregoing.
"Loan Documents" means this Agreement, the Notes, the Guaranty, the L/C
Applications, the L/C LaSalle Master Letter of Credit Agreement and the
Collateral Documents.
"Loan Party" means any of the Company and its Subsidiaries.
12
"Loans" means, taken together, Revolving Loans and Term Loans, or any of
them.
"Mandatory Prepayment Event" has the meaning ascribed thereto in subsection
6.2.2(a).
"Margin Stock" means any "margin stock" as defined in Regulation U.
"Material Adverse Effect" means: (i) a material adverse change in, or a
material adverse effect upon, the financial condition, operations, assets,
business, properties or prospects of the Company or the Company and the
Company's Subsidiaries taken as a whole, (ii) a material impairment of the
ability of the Company or any Subsidiary to perform any of its obligations under
any Loan Document to which it is a party or (iii) a material adverse effect upon
any substantial portion of the collateral then subject to the Collateral
Documents or upon the legality, validity, binding effect or enforceability
against the Company or any Subsidiary of any Loan Document to which it is a
party.
"Mortgage" means a mortgage, deed of trust, leasehold mortgage or similar
instrument granting the Agent a Lien on real property of the Company or any
Subsidiary.
"Multiemployer Pension Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Company or any member of the
Controlled Group may have any liability.
"Net Cash Proceeds" means:
(i) with respect to any Asset Sale the aggregate cash proceeds
(including cash proceeds received by way of deferred payment of principal
pursuant to a note, installment receivable or otherwise, but only as and
when received) received by the Company or any Subsidiary pursuant to such
Asset Sale net of: (x) the direct costs relating to such sale, transfer or
other disposition (including sales commissions and legal, accounting and
investment banking fees), (y) taxes paid or reasonably estimated by the
Company to be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements) and
(z) amounts required to be applied to the repayment of any Debt secured by
a Lien on the asset subject to such Asset Sale (other than the Loans);
(ii) with respect to any payment which constitutes Property Loss
Proceeds, an amount equal to the amount of such payment;
(iii)with respect to any issuance of equity securities, the aggregate
cash proceeds received by the Company or any Subsidiary pursuant to such
issuance, net of the direct costs relating to such issuance (including
sales and underwriter's commissions and legal, accounting and investment
banking fees; and
(iv) with respect to any issuance of Debt, the aggregate cash proceeds
received by the Company or any Subsidiary pursuant to such issuance, net of
the direct costs of such
13
issuance (including up-front fees and placement fees and legal, accounting
and investment banking fees); and
(v) with respect to any Event of Loss, the proceeds paid to any Loan
Party on account of such Event of Loss, net of (i) all of the costs and
expenses reasonably incurred in connection with the collection of such
proceeds, award or other payments, (ii) any amounts retained by or paid to
the parties having superior rights to such proceeds, awards or other
payments and (iii) any amounts which, under the Collateral Documents, are
permitted to be used, and are in fact so used, to replace the property that
was the subject of such Event of Loss in accordance with the terms of and
subject to the limitations contained in the Collateral Documents.
"New Equity Infusion" means the issuance or series of issuances by the
Company (excluding any issuances pursuant to (i) shareholder dividend
reinvestment programs, or (ii) employee benefit or other employee or director
compensation stock purchase plans existing as of the date hereof, in each case
to the extent they are issued in accordance with the terms of, and pursuant to
programs and plans not prohibited by, the terms of this Agreement and the Loan
Documents) of equity securities of the Company or any Subsidiary occurring after
the Restatement Effective Date.
"New Equity Infusion Documents" means each agreement, document and
instrument, each of which are in form and substance satisfactory to Agent and
the Banks in their discretion, pursuant to which the Company effects each New
Equity Infusion.
"Note" has the meaning ascribed thereto in Section 3.1.
"Obligations" means all Loans and other Debt, advances, debts, liabilities,
obligations, covenants and duties owing by the Company to any Bank or the Agent,
any Affiliate thereof or any other Person required to be indemnified, that
arises under any Loan Document and any Hedging Obligation of the Company owed to
LaSalle or another Bank or Banks, in each case whether or not for the payment of
money, whether arising by reason of an extension of credit, loan, guaranty,
indemnification or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired.
"OFAC" means the Office of Foreign Assets Control of the U.S. Department of
the Treasury
"Open Positions" means, at any time, the amount equal to the Inventory of
the Company on hand and firm commitments to purchase Inventory in certain energy
commodities which are not offset by either a sale contract or derivative
arrangement of the Company, as such amount is more fully determined in
accordance with the Company's internal policies (which are commercially
reasonable, consistent with the Company's past practices and included in the
Company's "Risk Management Policy," a true, correct and complete copy of which
has been delivered to Agent).
14
"Operating Lease" means any lease of (or other agreement conveying the
right to use) any real or personal property by the Company or any Subsidiary, as
lessee, other than any Capital Lease.
"Original Closing Date" means September 30, 2003.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pari Passu Debt" means all Debt of the Company and its Subsidiaries
incurred or arising under or pursuant to the Pari Passu Loan Documents.
"Pari Passu Loan Documents" means, collectively, the Series 1992B Variable
Rate Industrial Revenue Bond Documents, the Series 1993 Variable Rate Note
Documents and the Series 1997 7.5% Note Documents.
"Patriot Act" means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L.
107-56, as amended.
"Pension Plan" means a "pension plan," as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Pension Plan), and to which the Company or any member of the Controlled Group
may have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
"Person" means any natural person, corporation, partnership, trust, limited
liability company, association, governmental authority or unit, or any other
entity, whether acting in an individual, fiduciary or other capacity.
"PPLM Legal Fees" means, with respect to any period, the actual amount of
legal fees and expenses paid by the Company and its Subsidiaries with respect to
the case of Energy West Resources, Inc. v PPL Montana, LLC, CV 01-090-GF-SHE &
CV 01-124-GF-SHE; provided, however, such amount shall not exceed: (i) for the
Fiscal Quarter ending September 30, 2002, $240,268, (ii) for the Fiscal Quarter
ending December 31, 2002, $718,264, (iii) for the Fiscal Quarter ending March
31, 2003, $338,064, (iv) for the Fiscal Quarter ending June 30, 2003, $256,056,
and (v) for each Fiscal Quarter ending thereafter, an amount approved by Agent
and the Banks in their sole discretion.
"Pro Rata Share" means, with respect to any Bank, the percentage specified
opposite such Bank's name on Schedule 2.1 hereto, as adjusted from time to time
in accordance with the terms hereof.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
15
"Property Loss Proceeds" means: (i) the aggregate insurance proceeds
received in connection with one (1) or more related events under any property or
other, similar insurance policy and (ii) any award or other compensation with
respect to any condemnation of Property (or any transfer or disposition of
Property in lieu of condemnation).
"Proxy Contest Costs" means the actual amount of fees, costs and expenses
paid by the Company and its Subsidiaries with respect to the negotiation and
execution of the Turkey Vulture Settlement Documents (i) during the Fiscal
Quarter ending on September 30, 2003, not to exceed $50,631, (ii) during the
Fiscal Quarter ending on December 31, 2003, not to exceed $493,389, (iii) during
the Fiscal Quarter ending on March 31, 2004, not to exceed $5,474, and (iv) for
each Fiscal Quarter ending hereafter, an amount approved by Agent and the Banks
in their sole discretion.
"RCRA" has the meaning ascribed thereto in Section 9.15.
"Regulation D" means Regulation D of the FRB.
"Regulation U" means Regulation U of the FRB.
"Release" has the meaning specified in CERCLA and the term "Disposal" (or
"Disposed") has the meaning specified in RCRA; provided, in the event either
CERCLA or RCRA is amended so as to broaden the meaning of any term defined
thereby, such broader meaning shall apply as of the effective date of such
amendment; and provided, further, to the extent that the laws of a state wherein
any affected property lies establish a meaning for "Release" or "Disposal" which
is broader than is specified in either CERCLA or RCRA, such broader meaning
shall apply.
"Required Banks" means Banks having Pro Rata Shares aggregating sixty six
and two thirds percent (66 2/3%) or more.
"Responsible Officer" means the chief executive officer, chief financial
officer, treasurer or president of the Company, or any other officer of the
Company having substantially the same authority and responsibility.
"Restatement Effective Date" has the meaning ascribed thereto in Section
11.1.
"Revolving Commitment Amount" means $15,000,000.00, as reduced from time to
time pursuant to Section 6.1.
"Revolving Loan" has the meaning ascribed thereto in Section 2.1.1.
"Revolving Outstandings" means, at any time, the sum of: (i) the aggregate
principal amount of all outstanding Revolving Loans, plus (ii) the Stated Amount
of all Letters of Credit.
16
"Revolving Termination Date" means the earlier to occur of: (i) October 31,
2004 or (ii) such other date on which the Commitments with respect to terminate
pursuant to Sections 6 or 12.
"SEC" means the Securities and Exchange Commission or any other
governmental authority succeeding to any of the principal functions thereof.
"Series 1992B Variable Rate Industrial Revenue Bond Documents" means that
certain Loan Agreement dated as of September 1, 1992 by and between Cascade
County, Montana and Great Falls Gas Company (now known as Energy West,
Incorporated) relating to that certain Indenture of Trust dated as of September
1, 1992 by and between Cascade County, Montana and Davidson Trust Co., as
successor Trustee relating to Industrial Development Revenue Bonds (Great Falls
Gas Company Project), together with each agreement and instrument executed
and/or delivered in connection therewith.
"Series 1993 Variable Rate Note Documents" means that certain Indenture
dated as of June 1, 1993 by and between Great Falls Gas Company (now known as
Energy West, Incorporated) and U.S. Bank, National Association, as successor
Trustee relating to $7,800,000 Series 1993 Notes, together with each agreement
and instrument executed and/or delivered in connection therewith.
"Series 1997 7.5% Note Documents" means that certain Indenture dated as of
August 1, 1997 by and between Energy West Incorporated and HSBC Bank USA, as
successor Trustee relating to $8,000,000 7.50% Notes due June 1, 2012, together
with each agreement and instrument executed and/or delivered in connection
therewith.
"Solvent" means, as to any Person at any time, that (a) the fair value of
the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(32)(A) of the Bankruptcy Code and, in the alternative, for purposes of the
Uniform Fraudulent Transfer Act; (b) the present fair saleable value of the
Property of such Person is not less than the amount that will be required to pay
the probable liability of such person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its Property and pay its debts
and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Stated Amount" means, with respect to any Letter of Credit at any date of
determination: (i) the maximum aggregate amount available for drawing thereunder
under any and all circumstances plus (ii) the aggregate amount of all
unreimbursed payments and disbursements under such Letter of Credit.
17
"Subordinated Debt" means any unsecured Debt of the Company that has
subordination terms, covenants, pricing and other terms which have been approved
in writing by the Required Banks.
"Subsidiary" means, with respect to any Person, a corporation, partnership,
limited liability company or other entity of which such Person and/or its other
Subsidiaries own, directly or indirectly, such number of outstanding shares or
other ownership interests as have more than fifty percent (50%) of the ordinary
voting power for the election of directors or other managers of such
corporation, partnership, limited liability company or other entity. Unless the
context otherwise requires, each reference to Subsidiaries herein shall be a
reference to Subsidiaries of the Company. Further, the foregoing
notwithstanding, no Joint Venture shall be deemed a Subsidiary for purposes of
the Loan Documents unless expressly provided otherwise.
"Suretyship Liability" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to or otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon the shares of any other Person. The amount of any
Person's obligation in respect of any Suretyship Liability shall (subject to any
limitation set forth therein) be deemed to be the principal amount of the debt,
obligation or other liability supported thereby.
"Term Loan A" has the meaning ascribed thereto in subsection 2.1.2(a).
"Term Loan B" has the meaning ascribed thereto in subsection 2.1.2(b).
"Term Loans" means, taken together, Term Loan A and Term Loan B, or either
of them.
"Termination Date" means with respect to any Term Loan, the date of the
last scheduled repayment of principal of such Term Loan pursuant to Schedule
3.3 hereof.
"Total Debt" means, without duplication, all Debt of the Company and its
Subsidiaries, determined on a consolidated basis, excluding: (i) contingent
obligations in respect of Suretyship Liabilities (except to the extent
constituting Suretyship Liabilities in respect of Debt of a Person other than
the Company or any Subsidiary), (ii) Hedging Obligations, and (iii) Debt of the
Company to Subsidiaries and Debt of Subsidiaries to the Company or to other
Subsidiaries and (iv) contingent obligations in respect of undrawn letters of
credit.
"Total Debt to Capital Ratio" means, as of the last day of any Fiscal
Quarter, the ratio of: (i) Total Debt as of such day to (ii) Capital as of such
day.
"Turkey Vulture Settlement Documents" means that certain Agreement dated as
of November 20, 2003 by and among J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇,
18
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Turkey Vulture Fund XIII, Ltd., an Ohio limited liability
company, and the Company, together with each agreement, document and instrument
executed and/or delivered in connection therewith.
"Type of Loan" or "Type of Borrowing" has the meaning ascribed thereto in
Section 2.2.1. The types of Loans or borrowings under this Agreement are Base
Rate Loans or borrowings and LIBOR Loans or borrowings.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of Illinois; provided, that to the extent that the Uniform Commercial
Code is used to define any term herein or in any Loan Document and such term is
defined differently in different Articles or Divisions of the Uniform Commercial
Code, the definition of such term contained in Article or Division 9 shall
govern.
"Unmatured Event of Default" means any event that, if it continues uncured,
will, with lapse of time or notice or both, constitute an Event of Default.
"VaR" means, at any time, an amount equal to the Company's exposure to a
loss (or gain, as applicable) resulting from a change in prices of certain
energy commodities, as such loss is more fully determined in accordance with the
"Value at Risk Model" of the Company, a true, correct and complete copy of which
has been delivered to the Agent. For purposes of clarification, the "Value at
Risk Model" of the Company shall always calculate loss (or gain, as applicable)
by taking into account a change of energy commodities prices as it effects: (i)
the Company's Inventory of such energy commodities, (ii) the Company's purchase
commitments for such energy commodities, and (iii) the value (netting of gains
and losses) of the portfolio of the Company's derivative arrangements.
"Wholly-Owned Subsidiary" means, as to any Person, another Person all of
the shares of capital stock or other ownership interests of which (except
directors' qualifying shares) are at the time directly or indirectly owned by
such Person and/or another Wholly-Owned Subsidiary of such Person.
1.2 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) The term "including" is not limiting and means "including
without limitation."
(d) In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including";
the words "to" and
19
"until" each mean "to but excluding," and the word "through" means "to
and including."
(e) Unless otherwise expressly provided herein: (i) references to
agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and
other modifications thereto, but only to the extent such amendments
and other modifications are not prohibited by the terms of any Loan
Document, and (ii) references to any statute or regulation shall be
construed as including all statutory and regulatory provisions
amending, replacing, supplementing or interpreting such statute or
regulation.
(f) This Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are
cumulative and each shall be performed in accordance with its terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the
Company, the Banks and the other parties thereto and are the products
of all parties. Accordingly, they shall not be construed against the
Agent or the Banks merely because of the Agent's or Banks' involvement
in their preparation.
(h) Whenever this Agreement or any other Loan Document permits a
Person to use its "discretion," the parties hereto agree such
discretion shall be exercised by such Person reasonably and in good
faith.
20
SECTION 2. COMMITMENTS OF THE BANKS; BORROWING, CONVERSION AND LETTER OF CREDIT
PROCEDURES.
On the Restatement Effective Date, immediately prior to the effectiveness
of this Agreement, the principal amount of "Loans" outstanding under the
Original Credit Agreement is $15,229,304.20, (such outstanding "Loans"
collectively are referred to as the "Existing Loans"). The Company, Agent and
the Banks agree that: (i) the principal amount of $7,229,304.20 outstanding of
the Existing Loans shall continue as Revolving Loans hereunder; (ii) the
principal amount of $6,000,000 outstanding of the Existing Loans shall continue
as Term Loan A hereunder; and (iii) the principal amount of $2,000,000
outstanding of the Existing Loans shall continue as Term Loan B hereunder, in
each such case without in any way causing a novation of any of the Company's
obligations under the Original Credit Agreement. The parties hereto hereby
acknowledge and agree that, immediately upon the effectiveness of this
Agreement, the "Commitment Amount" under the Original Credit Agreement in the
amounts set forth therein shall be permanently and irrevocably reduced to a
Revolving Commitment Amount of $15,000,000 hereunder, and the aggregate amount
of the Banks' Pro Rata Shares of the Revolving Loans hereunder shall not exceed
$15,000,000. All portions of the Commitment Amount and the aggregate amount of
the Banks' Pro Rata Shares of the Revolving Loans under the Original Agreement,
in each case in excess of $15,000,000, shall be deemed to have permanently and
irrevocably expired as of the Restatement Effective Date and shall not be
available to the Company for purposes of borrowing Loans hereunder.
2.1 Commitments. On and subject to the terms and conditions of this
Agreement, each of the Banks, severally and for itself alone, agrees to make
loans to, and to issue or participate in letters of credit for the account of,
the Company as follows:
2.1.1 Revolving Loan Commitment. Each Bank will make loans on a
revolving basis ("Revolving Loans") from time to time until the Revolving
Termination Date in such Bank's Pro Rata Share of such aggregate amounts as
the Company may request from all Banks; provided, the Revolving
Outstandings will not at any time exceed the lesser of: (x) the Revolving
Commitment Amount and (y) the Borrowing Base. The Company hereby agrees and
acknowledges that, as a result of the recharacterization of the Existing
Loans set forth in this Section 2: (i) the outstanding principal balance of
the Revolving Loans as of the Restatement Effective Date equals
$7,229,304.20, (ii) the Revolving Outstandings as of the Restatement
Effective Date equals $8,929,304.20, and (iii) that the recharacterization
of the Existing Loans set forth in this Section 2 shall not constitute a
novation.
2.1.2 Term Loan Commitments.
(a) The Company, Agent and the Banks agree that the principal
amount of $6,000,000 outstanding of the Existing Loans shall continue
as a term loan ("Term Loan A") hereunder, without in any way causing a
novation of any of the Company's obligations under the Original Credit
Agreement.
(b) The Company, Agent and the Banks agree that the principal
amount of $2,000,000 outstanding of the Existing Loans shall continue
as a term loan
21
("Term Loan B") hereunder, without in any way causing a novation of
any of the Company's obligations under the Original Credit Agreement.
2.1.3 L/C Commitment.
(a) The Issuing Bank will issue standby letters of credit, in
each case containing such terms and conditions as are permitted by
this Agreement and are reasonably satisfactory to the Issuing Bank
(each a "Letter of Credit"), at the request of and for the account of
the Company from time to time before the date which is thirty (30)
days prior to the Revolving Termination Date and (b) as more fully set
forth in Section 2.3.2, each Bank agrees to purchase a participation
in each such Letter of Credit; provided: (i) the aggregate Stated
Amount of all Letters of Credit shall not at any time exceed
$6,000,000.00 and (ii) the Revolving Outstandings will not at any time
exceed the lesser of: (x) the Revolving Commitment Amount and (y) the
Borrowing Base. Any Letters of Credit issued pursuant to the Original
Credit Agreement shall be deemed a "Letter of Credit" issued under
this Agreement.
2.2 Loan Procedures.
2.2.1 Various Types of Loans. Term Loan A and Revolving Loans shall be
divided into tranches which are, either a Base Rate Loan or a LIBOR Loan
(each a "type" of Loan), as the Company shall specify in the related notice
of borrowing or conversion pursuant to Section 2.2.2 or 2.2.3; Term Loan B
shall consist entirely of Base Rate Loans. LIBOR Loans having the same
Interest Period are sometimes called a "Group" or collectively "Groups."
Base Rate Loans and LIBOR Loans may be outstanding at the same time;
provided, however, no more than five (5) different Groups of LIBOR Loans
shall be outstanding at any one (1) time and no LIBOR Loans shall be made
when an Event of Default has occurred and is continuing. All borrowings,
conversions and repayments of Revolving Loans shall be effected so that
each Bank will have a pro rata share (according to its Pro Rata Share) of
all types and Groups of Loans.
2.2.2 Borrowing Procedures. The Company shall give written notice or
telephonic notice (followed immediately by written confirmation thereof) to
the Agent of each proposed borrowing not later than: (a) in the case of a
Base Rate borrowing, 11:00 A.M., Chicago time, on the proposed date of such
borrowing, and (b) in the case of a LIBOR borrowing, 11:00 A.M., Chicago
time, at least three (3) Business Days prior to the proposed date of such
borrowing. Each such notice shall be effective upon receipt by the Agent,
shall be irrevocable, and shall specify the date, amount and type of
borrowing and, in the case of a LIBOR borrowing, the initial Interest
Period therefor. Promptly upon receipt of such notice, the Agent shall
advise each Bank thereof. Not later than 1:00 P.M., Chicago time, on the
date of a proposed borrowing, each Bank shall provide the Agent at the
office specified by the Agent with immediately available funds covering
such Bank's Pro Rata Share of such borrowing and, so long as the Agent has
not received written notice that the conditions precedent set forth in
Section 11 with respect
22
to such borrowing have not been satisfied, the Agent shall pay over the
funds received by the Agent to the Company on the requested borrowing date.
Each borrowing shall be on a Business Day. Each LIBOR borrowing shall be in
an aggregate amount of at least $100,000 and an integral multiple of at
least $100,000.
2.2.3 Conversion and Continuation Procedures.
(a) Subject to Section 2.2.1, the Company may, upon irrevocable
written notice to the Agent in accordance with clause (b) below:
(i) elect, as of any Business Day, to convert any Revolving
Loans or any portion of Term Loan A (or any part thereof in an
aggregate amount not less than $100,000 or a higher integral
multiple of $100,000) into Loans of the other type; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any LIBOR Loans having Interest Periods
expiring on such day (or any part thereof in an aggregate amount
not less than $100,000 or a higher integral multiple of $100,000)
for a new Interest Period;
provided, however, after giving effect to any prepayment, conversion
or continuation, the aggregate principal amount of each Group of LIBOR
Loans shall be at least $100,000 and an integral multiple of $100,000.
(b) The Company shall give written or telephonic (followed
immediately by written confirmation thereof) notice to the Agent of
each proposed conversion or continuation not later than: (i) in the
case of conversion into Base Rate Loans, 11:00 A.M., Chicago time, on
the proposed date of such conversion and (ii) in the case of
conversion into or continuation of LIBOR Loans, 11:00 A.M., Chicago
time, at least three (3) Business Days prior to the proposed date of
such conversion or continuation, specifying in each case:
(w) the proposed date of conversion or continuation;
(x) the aggregate amount of Loans to be converted or
continued;
(y) the type of Loans resulting from the proposed conversion
or continuation; and
(z) in the case of conversion into, or continuation of,
LIBOR Loans, the duration of the requested Interest Period
therefor.
(c) If, upon the expiration of any Interest Period applicable to
LIBOR Loans, the Company has failed to select timely a new Interest
Period to be applicable to such LIBOR Loans, the Company shall be
deemed to have elected to convert such LIBOR Loans into Base Rate
Loans effective on the last day of such Interest Period.
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(d) The Agent will promptly notify each Bank of its receipt of a
notice of conversion or continuation pursuant to this Section 2.2.3
or, if no timely notice is provided by the Company, of the details of
any automatic conversion.
(e) Any conversion of a LIBOR Loan on a day other than the last
day of an Interest Period therefor shall be subject to Section 8.4.
(f) Notwithstanding anything contained in this Agreement or any
of the other Loan Documents to the contrary, no LIBOR Loans shall be
made and no continuations of or conversions to LIBOR Loans for so long
as an Event of Default has occurred and is continuing
2.3 Letter of Credit Procedures.
2.3.1 L/C Applications. The Company shall give notice to the Agent and
the Issuing Bank of the proposed issuance of each Letter of Credit on a
Business Day which is at least three (3) Business Days (or such lesser
number of days as the Agent and the Issuing Bank shall agree in any
particular instance in their sole discretion) prior to the proposed date of
issuance of such Letter of Credit. Each such notice shall be accompanied by
an L/C Application, duly executed by the Company and in all respects
satisfactory to the Agent and the Issuing Bank, together with such other
documentation as the Agent or the Issuing Bank may request in support
thereof, it being understood that each L/C Application shall specify, among
other things, the date on which the proposed Letter of Credit is to be
issued, the expiration date of such Letter of Credit (which shall not be
later than the earlier to occur of: (x) one (1) year after the date of
issuance thereof and (y) in the event LaSalle is not the only Bank
hereunder, thirty (30) days prior to the scheduled Revolving Termination
Date) and whether such Letter of Credit is to be transferable in whole or
in part. So long as the Issuing Bank has not received written notice that
the conditions precedent set forth in Section 11 with respect to the
issuance of such Letter of Credit have not been satisfied, the Issuing Bank
shall issue such Letter of Credit on the requested issuance date. The
Issuing Bank shall promptly advise the Agent of the issuance of each Letter
of Credit and of any amendment thereto, extension thereof or event or
circumstance changing the amount available for drawing thereunder. In the
event of any inconsistency between the terms of any L/C Application or
documents executed pursuant thereto and the terms of this Agreement, the
terms of this Agreement shall control; provided, that, as long as LaSalle
is the Issuing Bank, the terms of the L/C LaSalle Master Letter of Credit
Agreement shall govern and control in the event of any inconsistency
between the terms of this Agreement and the L/C LaSalle Master Letter of
Credit Agreement.
2.3.2 Participations in Letters of Credit. Concurrently with the
issuance of each Letter of Credit, the Issuing Bank shall be deemed to have
sold and transferred to each other Bank, and each other Bank shall be
deemed irrevocably and unconditionally to have purchased and received from
the Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such other Bank's Pro Rata Share, in such
Letter of Credit and the Company's reimbursement obligations with respect
thereto. For the
24
purposes of this Agreement, the unparticipated portion of each Letter of
Credit shall be deemed to be the Issuing Bank's "participation" therein.
The Issuing Bank hereby agrees, upon request of the Agent or any Bank, to
deliver to the Agent or such Bank a list of all outstanding Letters of
Credit issued by the Issuing Bank, together with such information related
thereto as the Agent or such Bank may reasonably request.
2.3.3 Reimbursement Obligations. The Company hereby unconditionally
and irrevocably agrees to reimburse the Issuing Bank for each payment or
disbursement made by the Issuing Bank under any Letter of Credit honoring
any demand for payment made by the beneficiary thereunder, in each case on
the date that such payment or disbursement is made. Any amount not
reimbursed on the date of such payment or disbursement shall bear interest
from the date of such payment or disbursement to the date that the Issuing
Bank is reimbursed by the Company therefor, payable on demand, at a rate
per annum equal to the Base Rate from time to time in effect from time to
time in effect plus, beginning on the third Business Day after receipt of
notice from the Issuing Bank of such payment or disbursement, two percent
(2%). The Issuing Bank shall notify the Company and the Agent whenever any
demand for payment is made under any Letter of Credit by the beneficiary
thereunder; provided, the failure of the Issuing Bank to so notify the
Company shall not affect the rights of the Issuing Bank or the Banks in any
manner whatsoever.
2.3.4 Limitation on Obligations of Issuing Bank. In determining
whether to pay under any Letter of Credit, the Issuing Bank shall not have
any obligation to the Company or any Bank other than to confirm that any
documents required to be delivered under such Letter of Credit appear to
have been delivered and appear to comply on their face with the
requirements of such Letter of Credit. Any action taken or omitted to be
taken by the Issuing Bank under or in connection with any Letter of Credit,
if taken or omitted in the absence of gross negligence and willful
misconduct, shall not impose upon the Issuing Bank any liability to the
Company or any Bank and shall not reduce or impair the Company's
reimbursement obligations set forth in Section 2.3.3 or the obligations of
the Banks pursuant to Section 2.3.5.
2.3.5 Funding by Banks to Issuing Bank. If the Issuing Bank makes any
payment or disbursement under any Letter of Credit and the Company has not
reimbursed the Issuing Bank in full for such payment or disbursement by
11:00 A.M., Chicago time, on the date of such payment or disbursement, or
if any reimbursement received by the Issuing Bank from the Company is or
must be returned or rescinded upon or during any bankruptcy or
reorganization of the Company or otherwise, each other Bank shall be
obligated to pay to the Agent for the account of the Issuing Bank, in full
or partial payment of the purchase price of its participation in such
Letter of Credit, its Pro Rata Share of such payment or disbursement (but
no such payment shall diminish the obligations of the Company under Section
2.3.3), and, upon notice from the Issuing Bank, the Agent shall promptly
notify each other Bank thereof. Each other Bank irrevocably and
unconditionally agrees to so pay to the Agent in immediately available
funds for the Issuing Bank's account the amount of such other Bank's Pro
Rata Share of such payment or disbursement. If and to the extent any Bank
shall not have made such amount available to the Agent by
25
2:00 P.M., Chicago time, on the Business Day on which such Bank receives
notice from the Agent of such payment or disbursement (it being understood
that any such notice received after noon, Chicago time, on any Business Day
shall be deemed to have been received on the next following Business Day),
such Bank agrees to pay interest on such amount to the Agent for the
Issuing Bank's account forthwith on demand, for each day from the date such
amount was to have been delivered to the Agent to the date such amount is
paid, at a rate per annum equal to: (a) for the first three (3) days after
demand, the Federal Funds Rate from time to time in effect and (b)
thereafter, the Base Rate from time to time in effect. Any Bank's failure
to make available to the Agent its Pro Rata Share of any such payment or
disbursement shall not relieve any other Bank of its obligation hereunder
to make available to the Agent such other Bank's Pro Rata Share of such
payment, but no Bank shall be responsible for the failure of any other Bank
to make available to the Agent such other Bank's Pro Rata Share of any such
payment or disbursement.
2.4 Commitments Several. The failure of any Bank to make a requested Loan
on any date shall not relieve any other Bank of its obligation (if any) to make
a Loan on such date, but no Bank shall be responsible for the failure of any
other Bank to make any Loan to be made by such other Bank.
2.5 Certain Conditions. Notwithstanding any other provision of this
Agreement, no Bank shall have an obligation to make any Loan, or to permit the
continuation of or any conversion into any LIBOR Loan, and the Issuing Bank
shall not have any obligation to issue any Letter of Credit, if: (i) an Event of
Default or Unmatured Event of Default exists or (ii) the last day of the
Interest Period for such Loan would be on or past the Revolving Termination Date
or Termination Date (as applicable) of such Loan.
SECTION 3. NOTES EVIDENCING LOANS.
3.1 Notes. The Loans of each Bank shall be evidenced by a promissory note
(each a "Note") substantially in the form set forth in Exhibit A, with
appropriate insertions, payable to the order of such Bank in a face principal
amount equal to the sum of such Bank's Pro Rata Share of the Revolving
Commitment Amount plus the principal amount of such Bank's Term Loans.
3.2 Recordkeeping. Each Bank shall record in its records, or at its option
on the schedule attached to its Note, the date and amount of each Loan made by
such Bank, each repayment or conversion thereof and, in the case of each LIBOR
Loan, the dates on which each Interest Period for such Loan shall begin and end.
The aggregate unpaid principal amount so recorded shall be rebuttable
presumptive evidence of the principal amount owing and unpaid on such Note. The
failure to so record any such amount or any error in so recording any such
amount shall not, however, limit or otherwise affect the obligations of the
Company hereunder or under any Note to repay the principal amount of the Loans
evidenced by such Note together with all interest accruing thereon
3.3 Maturity. (i) The Revolving Loan shall mature, and the Company shall
repay all unpaid Obligations in full with respect to the Revolving Loan no later
than on the Revolving Termination Date and (ii) the Term Loans shall mature, and
the Company shall repay the
26
outstanding principal amounts thereof through periodic payments on the dates and
in the amounts set forth on Schedule 3.3 hereto, and the Company shall repay any
outstanding Obligations with respect to each of Term Loan A and Term Loan B on
the Termination Date applicable to each of them.
SECTION 4. INTEREST.
4.1 Interest Rates. The Company promises to pay interest on the unpaid
principal amount of each Loan for the period commencing on the date of such Loan
until (but not including such date as) such Loan is paid in full as follows:
(a) at all times while such Loan is a Base Rate Loan, at a
rate per annum equal to the sum of the Base Rate plus the Base
Rate Margin applicable to such Loan in effect from time to time;
and
(b) at all times while such Loan is a LIBOR Loan, at a rate
per annum equal to the sum of LIBOR applicable to the Interest
Period for such Loan plus the LIBOR Margin applicable to such
Loan in effect from time to time;
provided, at any time an Event of Default exists, if requested by the Required
Banks, the interest rate applicable to each Loan shall be equal to the interest
rate applicable to Base Rate Loans plus three percent (3.00%), all of which
shall be payable on demand. Additionally, at any time any Event of Default
exist, all other amounts, fees and sums owing to the Agent and the Banks under
this Agreement and the other Loan Documents, if requested by the Required Banks
and to the extent permitted under applicable law, shall bear interest at a rate
per annum equal to the sum of the Base Rate from time to time in effect, plus
two percent (2%), all of which shall be payable on demand.
4.2 Interest Payment Dates. Accrued interest on each Base Rate Loan shall
be payable in arrears on the last day of each calendar month and on the
Revolving Termination Date and Termination Date, as applicable. Accrued interest
on each LIBOR Loan shall be payable on the last day of each Interest Period
relating to such Loan and on the Revolving Termination Date and Termination
Date, as applicable (and, in the case of a LIBOR Loan with a six-month Interest
Period (or such other longer Interest Period agreed upon by the Company and
Agent), on the three-month anniversary of the first day of such Interest Period
and on every subsequent three-month anniversary of the first day of such
Interest Period (as applicable)). On and after the Revolving Termination Date or
Termination Date, as applicable, accrued interest on all Loans shall be payable
on demand.
4.3 Setting and Notice of LIBOR. The applicable LIBOR for each Interest
Period shall be determined by the Agent, and notice thereof shall be given by
the Agent promptly to the Company and each Bank. Each determination of the
applicable LIBOR by the Agent shall be conclusive and binding upon the parties
hereto, in the absence of demonstrable error. The Agent shall, upon written
request of the Company or any Bank, deliver to the Company or such Bank a
statement showing the computations used by the Agent in determining any
applicable LIBOR hereunder.
27
4.4 Computation of Interest. Interest on each Loan shall be computed for
the actual number of days elapsed (including the day a Loan is made but
excluding the day it is repaid) on the basis of a year of three hundred sixty
(360) days. The applicable interest rate for each Base Rate Loan shall change
simultaneously with each change in the Base Rate.
4.5 Maximum Rate of Interest. Anything herein to the contrary
notwithstanding, the obligations of the Company hereunder and under the Notes
shall be subject to the limitation that payments of interest shall not be
required, for any period for which interest in computed hereunder, to the extent
(but only to the extent) that contracting for or receiving such payment by the
respective Bank would be contrary to the provisions of any law applicable to
such Bank limiting the highest rate of interest which may be lawfully contracted
for, charged or received by such Bank, and in such event the Company shall pay
such Bank interest at the highest rate permitted by applicable law.
SECTION 5. FEES.
5.1 Commitment Fee. The Company agrees to pay to the Agent for the account
of each Bank a commitment fee, for the period from the Original Closing Date to
the Revolving Termination Date, at the Commitment Fee Rate in effect from time
to time of such Bank's Pro Rata Share (as adjusted from time to time) of the
unused amount of the Revolving Commitment Amount; provided, if requested by the
Required Banks, the rate applicable shall be increased by two percent (2%) at
any time that an Event of Default exists. For purposes of calculating usage
under this Section, the Revolving Commitment Amount shall be deemed used to the
extent of the aggregate principal amount of all outstanding Loans plus the
Stated Amount of all Letters of Credit. Such commitment fee shall be payable in
arrears on the last Business Day of each calendar quarter and on the Revolving
Termination Date for any period then ending for which such commitment fee shall
not have previously been paid. The commitment fee shall be computed for the
actual number of days elapsed on the basis of a year of three hundred sixty
(360) days.
5.2 Letter of Credit Fees.
(a) The Company agrees to pay to the Agent for the account
of each Bank a letter of credit fee for each Letter of Credit
equal to the L/C Fee Rate in effect from time to time of such
Bank's Pro Rata Share (as adjusted from time to time) of the
undrawn amount of such Letter of Credit (computed for the actual
number of days elapsed on the basis of a year of three hundred
sixty (360) days); provided, if requested by the Required Banks,
the rate applicable to each Letter of Credit shall be increased
by two percent (2%) at any time that an Event of Default exists.
Such letter of credit fee shall be payable in arrears on the last
day of each calendar quarter and on the Revolving Termination
Date (or such later date on which such Letter of Credit expires
or is terminated) for the period from the date of the issuance of
each Letter of Credit (or the last day on which the letter of
credit fee was paid with respect thereto) to the date such
payment is due or, if earlier, the date on which such Letter of
Credit expired or was terminated.
(b) In addition, with respect to each Letter of Credit, the
Company agrees to pay to the Issuing Bank, for its own account:
(i) such fees and expenses as the
28
Issuing Bank customarily requires in connection with the
issuance, negotiation, processing and/or administration of
letters of credit in similar situations and (ii) a letter of
credit fronting fee in the amount and at the times agreed to by
the Company and the Issuing Bank.
5.3 Upfront Fees. The Company agrees to pay to the Agent for the account of
each Bank on the Restatement Effective Date an upfront fee in the amount of
$120,000 (and the Agent agrees to promptly forward to each Bank a portion of
such upfront fee in the amount previously agreed to between the Agent and such
Bank), which fee shall be deemed to be fully-earned and non-refundable on the
Restatement Effective Date.
5.4 Agent's Fees. The Company agrees to pay to the Agent such agent's fees
as are mutually agreed to from time to time by the Company and the Agent.
SECTION 6. REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT AMOUNT;
PREPAYMENTS AND PAYMENTS.
6.1 Reduction or Termination of the Revolving Commitment Amount.
6.1.1 Voluntary Reduction or Termination of the Revolving
Commitment Amount. The Company may from time to time on at least five
(5) Business Days prior written notice received by the Agent (which
shall promptly advise each Bank thereof) permanently reduce the
Revolving Commitment Amount to an amount not less than the Revolving
Outstandings. Any such reduction shall be in an amount not less than
$1,000,000 or a higher integral multiple of $1,000,000. Concurrently
with any reduction of the Revolving Commitment Amount to zero ($0),
the Company shall pay all interest on the Revolving Loans, all
commitment fees and all letter of credit fees and shall Cash
Collateralize in full all obligations arising with respect to the
Letters of Credit.
6.1.2 Reserved
6.1.3 All Reductions of the Revolving Commitment Amount. All
reductions of the Revolving Commitment Amount shall reduce the
Revolving Commitments pro rata among the Banks according to their
respective Pro Rata Shares.
6.2 Prepayments.
6.2.1 Voluntary Prepayments. The Company may from time to time
prepay the Loans in whole or in part; provided, the Company shall give
the Agent (which shall promptly advise each Bank) notice thereof not
later than 11:00 A.M., Chicago time, on the day of such prepayment
(which shall be a Business Day), specifying the Loans to be prepaid
and the date and amount of prepayment. Any such partial prepayment
shall be in an amount equal to $100,000 or a higher integral multiple
of $100,000. Any amount of Revolving Loans which are voluntarily
prepaid may be reborrowed, subject to the conditions contained herein
and in the other Loan Documents for such borrowings.
29
6.2.2 Mandatory Prepayments.
(a) The Company shall make a prepayment of the Loans upon
the occurrence of any of the following (each a "Mandatory
Prepayment Event") at the following times and in the following
amounts (such applicable amounts being referred to as "Designated
Proceeds"):
(i) concurrently with the receipt by the Company or any
Subsidiary of any Net Cash Proceeds from any Asset Sale, in
an amount equal to one hundred percent (100%) of such Net
Cash Proceeds; provided, however, in the event that, at the
time of any such sale, no Event of Default shall exist or
shall result from such sale, the Company may retain up to
$500,000 in the aggregate of the Net Cash Proceeds resulting
from all such Asset Sales which have occurred since the
Original Closing Date; provided, further, that if a
mandatory prepayment of the Loans is required pursuant to
this subsection 6.2(a)(i) and (x) no Event of Default has
occurred and is continuing and (y) the amount of Designated
Proceeds with respect to such Asset Sale is (A) less than or
equal to $2,000,000, such prepayment shall be applied to the
Loans as the Company elects (provided that if the Company
elects to apply such prepayment(s) to Term Loan A, such
payment(s) shall be applied to the installments thereof in
the inverse order of their maturity), or (B) in excess of
$2,000,000 such prepayment shall be applied first, pro rata
between the Term Loans in inverse order of maturity to the
respective remaining installments thereof, second, to the
Revolving Loans, and third, to any other Obligations;
(ii) concurrently with the receipt by the Company or
any Subsidiary of any Net Cash Proceeds from any issuance of
any Debt excluding the proceeds of Debt permitted by clauses
(a) through (i) of Section 10.7), an amount equal to one
hundred percent (100%) of such Net Cash Proceeds, provided,
further, mandatory prepayments under this subsection
6.2(a)(ii) shall be applied first, pro rata between the Term
Loans in inverse order of maturity to the respective
remaining installments thereof, second, to the Revolving
Loans, and third, to any other Obligations;
(iii) concurrently upon receipt by the Company or any
Subsidiary of the Company of any Property Loss Proceeds, in
an amount equal to such Property Loss Proceeds; provided,
the recipient (other than Agent) of any payment which
constitutes Property Loss Proceeds may reinvest such payment
within one hundred eighty (180) days, in replacement assets
comparable to the assets giving rise to such payment;
provided, further, if the Company or its applicable
Subsidiary does not intend to reinvest such payment, or if
the time period set forth in this sentence expires without
such Person having reinvested such payment, the Company
shall prepay the Loans in an amount equal to such payment;
provided, further, mandatory prepayments under this
subsection 6.2(a)(iii) shall be applied first, pro rata
30
between the Term Loans in inverse order of maturity to the
respective remaining installments thereof, second, to the
Revolving Loans, and third, to any other Obligations;
(iv) concurrently with the receipt by the Company or
any Subsidiary of the Company (or any Joint Venture) of any
proceeds of or relating to any Existing Claim in an amount
greater than or equal to $15,000, whether as a result of any
award, settlement, order, judgment, liquidation or
otherwise, an amount equal to one hundred percent (100%) of
such proceeds (or, if received by such Joint Venture, in an
amount at least equal to the Company's ownership percentage
of such proceeds when, but only when, distributed by such
Joint Venture to the Company or any Subsidiary of the
Company); provided, that mandatory prepayments under this
subsection 6.2(a)(iv) shall be applied to the Revolving
Loans, or, if no Revolving Loans are then outstanding, such
proceeds may be retained by the Company; and
(v) concurrently with the receipt by the Company or any
Subsidiary of any Net Cash Proceeds from a New Equity
Infusion in an amount equal to or less than the outstanding
amount of Term Loan B, such payment to be applied to the
Term Loan B, or, if Term Loan B has been repaid, the
proceeds may be retained by the Company.
(b) If on any day the Revolving Outstandings exceed the
Borrowing Base, the Company shall immediately prepay the
Revolving Loans and/or Cash Collateralize the outstanding Letters
of Credit, or do a combination of the foregoing, in an amount
sufficient to eliminate such excess.
(c) If on any day on which the Revolving Outstandings exceed
the Revolving Commitment Amount, the Company shall immediately
prepay the Revolving Loans or Cash Collateralize the outstanding
Letters of Credit, or do a combination of the foregoing, in an
amount sufficient to eliminate such excess.
6.3 Miscellaneous Prepayment Provisions. Any partial prepayment of a Group
of LIBOR Loans shall be subject to the proviso to subsection 2.2.3(a). Any
prepayment of a LIBOR Loan on a day other than the last day of an Interest
Period therefor shall include interest on the principal amount being repaid and
shall be subject to Section 8.4. Except as otherwise provided herein, all
prepayments of Term Loans shall be applied pro rata between the Term Loans in
the inverse order of maturity to the respective remaining installments thereof.
6.4 Payment of Loans. Each Revolving Loan made by each Bank shall be paid
in full on the Revolving Termination Date and the Term Loans made by each Bank
shall be paid in installments of the Term Loans as set forth on Schedule 3.1.
SECTION 7. MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. All payments of principal of or interest on the
Notes, and of all fees, shall be made by the Company to the Agent in immediately
available funds at the office
31
specified by the Agent not later than noon, Chicago time, on the date due; and
funds received after that hour shall be deemed to have been received by the
Agent on the following Business Day. Provided that such Bank has made all
payments required to be made by it under this Agreement and the other Loan
Documents, the Agent shall promptly remit to each Bank its share of all such
payments received in collected funds by the Agent for the account of such Bank.
All payments under Section 8.1 shall be made by the Company directly to the Bank
entitled thereto.
7.2 Application of Certain Payments. Each payment of principal shall be
applied to such Loans as the Company shall direct by notice to be received by
the Agent on or before the date of such payment or, in the absence of such
notice, as the Agent shall determine in its discretion. Concurrently with each
remittance to any Bank of its share of any such payment, the Agent shall advise
such Bank as to the application of such payment.
7.3 Due Date Extension. If any payment of principal or interest with
respect to any of the Loans, or of any fees, falls due on a day which is not a
Business Day, then such due date shall be extended to the immediately following
Business Day (unless, in the case of a LIBOR Loan, such immediately following
Business Day is the first Business Day of a calendar month, in which case such
due date shall be the immediately preceding Business Day) and, in the case of
principal, additional interest shall accrue and be payable for the period of any
such extension.
7.4 Setoff. The Company agrees that the Agent and each Bank have all rights
of set-off and bankers' lien provided by applicable law, and in addition
thereto, the Company agrees that at any time any Event of Default exists, the
Agent and each Bank may apply to the payment of any obligations of the Company
hereunder, whether or not then due, any and all balances, credits, deposits,
accounts or moneys of the Company then or thereafter with the Agent or such
Bank.
7.5 Proration of Payments. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise,
but excluding any payment pursuant to Section 8.7 or 14.9 and payments of
interest on any Affected Loan) on account of principal of or interest on any
Loan (or on account of its participation in any Letter of Credit) in excess of
its pro rata share of payments and other recoveries obtained by all Banks on
account of principal of and interest on the Loans (or such participation) then
held by them, such Bank shall purchase from the other Banks such participations
in the Loans (or sub-participations in Letters of Credit) held by them as shall
be necessary to cause such purchasing Bank to share the excess payment or other
recovery ratably with each of them; provided, if all or any portion of the
excess payment or other recovery is thereafter recovered from such purchasing
Bank, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery.
7.6 Taxes. All payments of principal of, and interest on, the Loans and all
other amounts payable hereunder shall be made free and clear of and without
deduction for any present or future income, excise, stamp or franchise taxes and
other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, excluding franchise taxes and taxes
imposed on or measured by any Bank's net income or receipts (all non-excluded
items being called "Taxes"). If any withholding or deduction from any payment to
be made by the Company hereunder is required in respect of any Taxes pursuant to
any applicable law, rule or regulation, then the Company will:
32
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such
payment to such authority; and
(c) pay to the Agent for the account of the Banks such
additional amount as is necessary to ensure that the net amount
actually received by each Bank will equal the full amount such
Bank would have received had no such withholding or deduction
been required.
Moreover, if any Taxes are directly asserted against the Agent or any Bank with
respect to any payment received by the Agent or such Bank hereunder, the Agent
or such Bank may pay such Taxes and the Company will promptly pay such
additional amounts (including any penalty, interest or expense) as is necessary
in order that the net amount received by such Person after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount
such Person would have received had such Taxes not been asserted.
If the Company fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent, for the account of the respective
Banks, the required receipts or other required documentary evidence, the Company
shall indemnify the Banks for any incremental Taxes, interest or penalties that
may become payable by any Bank as a result of any such failure. For purposes of
this Section 7.6, a distribution hereunder by the Agent or any Bank to or for
the account of any Bank shall be deemed a payment by the Company.
Each Bank that: (a) is organized under the laws of a jurisdiction other
than the United States of America or a state thereof and (b)(i) is a party
hereto on the Restatement Effective Date or (ii) becomes an assignee of an
interest under this Agreement under Section 14.9.1 after the Restatement
Effective Date (unless such Bank was already a Bank hereunder immediately prior
to such assignment) shall execute and deliver to the Company and the Agent one
or more (as the Company or the Agent may reasonably request) United States
Internal Revenue Service Form W8EC or Form W8BEN or such other forms or
documents, appropriately completed, as may be applicable to establish that such
Bank is exempt from withholding or deduction of Taxes. The Company shall not be
required to pay additional amounts to any Bank pursuant to this Section 7.6 to
the extent that the obligation to pay such additional amounts would not have
arisen but for the failure of such Bank to comply with this paragraph.
SECTION 8. INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS.
8.1 Increased Costs.
(a) If, after the date hereof, the adoption of, or any
change in, any applicable law, rule or regulation, or any change
in the interpretation or administration of any applicable law,
rule or regulation by any governmental
33
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Bank (or any LIBOR Office of such Bank) with any request or
directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(i) shall subject any Bank (or any LIBOR Office of such
Bank) to any tax, duty or other charge with respect to its
LIBOR Loans, its Note or its obligation to make LIBOR Loans,
or shall change the basis of taxation of payments to any
Bank of the principal of or interest on its LIBOR Loans or
any other amounts due under this Agreement in respect of its
LIBOR Loans or its obligation to make LIBOR Loans (except
for changes in the rate of tax on the overall net income of
such Bank or its LIBOR Office imposed by the jurisdiction in
which such Bank's principal executive office or LIBOR Office
is located);
(ii) shall impose, modify or deem applicable any
reserve (including any reserve imposed by the FRB, but
excluding any reserve included in the determination of
interest rates pursuant to Section 4), special deposit or
similar requirement against assets of, deposits with or for
the account of, or credit extended by any Bank (or any LIBOR
Office of such Bank); or
(iii) shall impose on any Bank (or its LIBOR Office)
any other condition affecting its LIBOR Loans, its Note or
its obligation to make LIBOR Loans;
and the result of any of the foregoing is to increase the cost to
(or to impose a cost on) such Bank (or any LIBOR Office of such
Bank) of making or maintaining any LIBOR Loan, or to reduce the
amount of any sum received or receivable by such Bank (or its
LIBOR Office) under this Agreement or under its Note with respect
thereto, then upon demand by such Bank (which demand shall be
accompanied by a statement setting forth the basis for such
demand and a calculation of the amount thereof in reasonable
detail, a copy of which shall be furnished to the Agent), the
Company shall pay directly to such Bank such additional amount as
will compensate such Bank for such increased cost or such
reduction.
(b) If any Bank shall reasonably determine that any change
in, or the adoption or phase-in of, any applicable law, rule or
regulation regarding capital adequacy, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Bank or any Person controlling such Bank with any request or
directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of
return on such Bank's or such controlling Person's capital as a
consequence of such Bank's obligations hereunder or under any
Letter of Credit to a level below that which such
34
Bank or such controlling Person could have achieved but for such
change, adoption, phase-in or compliance (taking into
consideration such Bank's or such controlling Person's policies
with respect to capital adequacy) by an amount deemed by such
Bank or such controlling Person to be material, then from time to
time, upon demand by such Bank (which demand shall be accompanied
by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of
which shall be furnished to the Agent), the Company shall pay to
such Bank such additional amount as will compensate such Bank or
such controlling Person for such reduction.
8.2 Basis for Determining Interest Rate Inadequate or Unfair. If with
respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not
being offered to the Agent in the interbank eurodollar market for
such Interest Period, or the Agent otherwise reasonably
determines (which determination shall be binding and conclusive
on the Company) that by reason of circumstances affecting the
interbank eurodollar market adequate and reasonable means do not
exist for ascertaining the applicable LIBOR; or
(b) Banks having aggregate Pro Rata Shares of forty percent
(40%) or more advise the Agent that LIBOR as determined by the
Agent will not adequately and fairly reflect the cost to such
Banks of maintaining or funding LIBOR Loans for such Interest
Period (taking into account any amount to which such Banks may be
entitled under Section 8.1) or that the making or funding of
LIBOR Loans has become impracticable as a result of an event
occurring after the date of this Agreement which in the opinion
of such Banks materially affects such Loans;
then the Agent shall promptly notify the other parties thereof and, so long as
such circumstances shall continue: (i) no Bank shall be under any obligation to
make or convert into LIBOR Loans and (ii) on the last day of the current
Interest Period for each LIBOR Loan, such Loan shall, unless then repaid in
full, automatically convert to a Base Rate Loan.
8.3 Changes in Law Rendering LIBOR Loans Unlawful. If any change in, or the
adoption of any new, law, rule or regulation, or any change in the
interpretation of any applicable law, rule or regulation by any governmental or
other regulatory body charged with the administration thereof, should make it
(or in the good faith judgment of any Bank cause a substantial question as to
whether it is) unlawful for any Bank to make, maintain or fund LIBOR Loans, then
such Bank shall promptly notify each of the other parties hereto and, so long as
such circumstances shall continue: (a) such Bank shall have no obligation to
make or convert into LIBOR Loans (but shall make Base Rate Loans concurrently
with the making of or conversion into LIBOR Loans by the Banks which are not so
affected, in each case in an amount equal to the amount of LIBOR Loans which
would be made or converted into by such Bank at such time in the absence of such
circumstances) and (b) on the last day of the current Interest Period for each
LIBOR Loan of such Bank (or, in any event, on such earlier date as may be
required by the relevant law, regulation or interpretation), such LIBOR Loan
shall, unless then repaid in full,
35
automatically convert to a Base Rate Loan. Each Base Rate Loan made by a Bank
which, but for the circumstances described in the foregoing sentence, would be a
LIBOR Loan (an "Affected Loan") shall remain outstanding for the same period as
the Group of LIBOR Loans of which such Affected Loan would be a part absent such
circumstances.
8.4 Funding Losses. The Company hereby agrees that upon demand by any Bank
(which demand shall be accompanied by a statement setting forth the basis for
the amount being claimed, a copy of which shall be furnished to the Agent), the
Company will indemnify such Bank against any net loss or expense which such Bank
may sustain or incur (including any net loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such Bank
to fund or maintain any LIBOR Loan), as reasonably determined by such Bank, as a
result of: (a) any payment, prepayment or conversion of any LIBOR Loan of such
Bank on a date other than the last day of an Interest Period for such Loan
(including any conversion pursuant to Section 8.3) or (b) any failure of the
Company to borrow, prepay, convert or continue any Loan on a date specified
therefor in a notice of borrowing, prepayment, conversion or continuation
pursuant to this Agreement. For this purpose, all notices to the Agent pursuant
to this Agreement shall be deemed to be irrevocable.
8.5 Right of Banks to Fund through Other Offices. Each Bank may, if it so
elects, fulfill its commitment as to any LIBOR Loan by causing a foreign branch
or Affiliate of such Bank to make such Loan; provided, in such event for the
purposes of this Agreement such Loan shall be deemed to have been made by such
Bank and the obligation of the Company to repay such Loan shall nevertheless be
to such Bank and shall be deemed held by it, to the extent of such Loan, for the
account of such branch or Affiliate.
8.6 Discretion of Banks as to Manner of Funding. Notwithstanding any
provision of this Agreement to the contrary, each Bank shall be entitled to fund
and maintain its funding of all or any part of its Loans in any manner it sees
fit, it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if such Bank had actually funded and
maintained each LIBOR Loan during each Interest Period for such Loan through the
purchase of deposits having a maturity corresponding to such Interest Period and
bearing an interest rate equal to the LIBOR for such Interest Period.
8.7 Mitigation of Circumstances; Replacement of Banks.
(a) Each Bank shall promptly notify the Company and the
Agent of any event of which it has knowledge which will result
in, and will use reasonable commercial efforts available to it
(and not, in such Bank's sole judgment, otherwise disadvantageous
to such Bank) to mitigate or avoid: (i) any obligation by the
Company to pay any amount pursuant to Section 7.6 or 8.1 or (ii)
the occurrence of any circumstances described in Section 8.2 or
8.3 (and, if any Bank has given notice of any such event
described in clause (i) or (ii) above and thereafter such event
ceases to exist, such Bank shall promptly so notify the Company
and the Agent). Without limiting the foregoing, each Bank will
designate a different funding office if such designation will
avoid (or reduce the cost to the Company of) any event described
in
36
clause (i) or (ii) of the preceding sentence and such designation
will not, in such Bank's sole judgment, be otherwise
disadvantageous to such Bank.
(b) If the Company becomes obligated to pay additional
amounts to any Bank pursuant to Section 7.6 or 8.1, or any Bank
gives notice of the occurrence of any circumstances described in
Section 8.2 or 8.3, the Company may designate another bank which
is acceptable to the Agent and the Issuing Bank in their
reasonable discretion (such other bank being called a
"Replacement Bank") to purchase the Loans of such Bank and such
Bank's rights hereunder, without recourse to or warranty by, or
expense to, such Bank, for a purchase price equal to the
outstanding principal amount of the Loans payable to such Bank
plus any accrued but unpaid interest on such Loans and all
accrued but unpaid fees owed to such Bank and any other amounts
payable to such Bank under this Agreement, and to assume all the
obligations of such Bank hereunder, and, upon such purchase and
assumption (pursuant to an Assignment Agreement), such Bank shall
no longer be a party hereto or have any rights hereunder (other
than rights with respect to indemnities and similar rights
applicable to such Bank prior to the date of such purchase and
assumption) and shall be relieved from all obligations to the
Company hereunder, and the Replacement Bank shall succeed to the
rights and obligations of such Bank hereunder.
8.8 Conclusiveness of Statements; Survival of Provisions. Determinations
and statements of any Bank pursuant to Section 8.1, 8.2, 8.3 or 8.4 shall be
conclusive absent demonstrable error. Banks may use reasonable averaging and
attribution methods in determining compensation under Sections 8.1 and 8.4, and
the provisions of such Sections shall survive repayment of the Loans,
cancellation of the Notes, expiration or termination of the Letters of Credit
and termination of this Agreement.
SECTION 9. WARRANTIES.
To induce the Agent and the Banks to enter into this Agreement and to
induce the Banks to make Loans and issue and participate in Letters of Credit
hereunder, the Company warrants to the Agent and the Banks that:
9.1 Organization. The Company is a corporation validly existing and in good
standing under the laws of the State of Montana; each Subsidiary is validly
existing and in good standing under the laws of the jurisdiction of its
organization; and each of the Company and each Subsidiary is duly qualified to
do business in each jurisdiction where, because of the nature of its activities
or properties, such qualification is required, except for such jurisdictions
where the failure to so qualify would not have a Material Adverse Effect.
9.2 Authorization; No Conflict. Each of the Company and each other Loan
Party is duly authorized to execute and deliver each Loan Document to which it
is a party, the Company is duly authorized to borrow monies hereunder and each
of the Company and each other Loan Party is duly authorized to perform its
obligations under each Loan Document to which it is a party. The execution,
delivery and performance by the Company of this Agreement and by each of the
Company and each other Loan Party of each Loan Document to which it is a party,
and the
37
borrowings by the Company hereunder, do not and will not: (a) require any
consent or approval of any governmental agency or authority (other than any
consent or approval which has been obtained and is in full force and effect),
(b) conflict with: (i) any provision of law, (ii) the charter, bylaws or other
organizational documents of the Company or any other Loan Party or (iii) any
agreement, indenture, instrument or other document, or any judgment, order or
decree, which is binding upon the Company or any other Loan Party or any of
their respective properties or (c) require, or result in, the creation or
imposition of any Lien on any asset of the Company, any Subsidiary or any other
Loan Party (other than Liens in favor of the Agent created pursuant to the
Collateral Documents and Liens securing only the Pari Passu Debt which is
otherwise expressly permitted hereunder).
9.3 Validity and Binding Nature. Each of this Agreement and each other Loan
Document to which the Company or any other Loan Party is a party is the legal,
valid and binding obligation of such Person, enforceable against such Person in
accordance with its terms, subject to bankruptcy, insolvency and similar laws
affecting the enforceability of creditors' rights generally and to general
principles of equity.
9.4 Financial Condition. The audited consolidated financial statements of
the Company and its Subsidiaries as at June 30, 2003, copies of each of which
have been delivered to each Bank, were prepared in accordance with GAAP
(subject, in the case of such unaudited statements, to the absence of footnotes
and to normal year-end adjustments) and present fairly the consolidated
financial condition of the Company and its Subsidiaries as at such dates and the
results of their operations for the periods then ended.
9.5 No Material Adverse Change. Except as set forth on Schedule 9.5, since
June 30, 2003, there has been no material adverse change in the financial
condition, operations, assets, business, properties or prospects of the Company
and its Subsidiaries taken as a whole.
9.6 Litigation and Contingent Liabilities. No litigation (including
derivative actions), arbitration proceeding or governmental investigation or
proceeding is pending or, to the Company's knowledge, threatened against the
Company or any Subsidiary which might reasonably be expected to have a Material
Adverse Effect, except as set forth in Schedule 9.6. Other than any liability
incident to such litigation or proceedings, neither the Company nor any
Subsidiary has any material contingent liabilities not listed on Schedule 9.6 or
permitted by Section 10.7.
9.7 Ownership of Properties; Liens. Each of the Company and each Subsidiary
owns good title and, in the case of real property, good and marketable fee,
leasehold or easement (as applicable) title to all of its properties and assets,
real and personal, tangible and intangible, of any nature whatsoever (including
patents, trademarks, trade names, service marks and copyrights), free and clear
of all Liens, charges and claims (including infringement claims with respect to
patents, trademarks, service marks, copyrights and the like) except as permitted
by Section 10.8.
9.8 Subsidiaries. As of the Restatement Effective Date, the Company has no
Subsidiaries other than those listed on Schedule 9.8.
38
9.9 Pension Plans.
(a) During the period of twelve (12) consecutive months
prior to the date of the execution and delivery of this Agreement
or the making of any Loan or the issuance of any Letter of
Credit, (i) no steps have been taken to terminate any Pension
Plan and (ii) no contribution failure has occurred with respect
to any Pension Plan sufficient to give rise to a Lien under
Section 302(f) of ERISA. No condition exists or event or
transaction has occurred with respect to any Pension Plan which
could result in the incurrence by the Company of any material
liability, fine or penalty.
(b) All contributions (if any) have been made to any
Multiemployer Pension Plan that are required to be made by the
Company or any other member of the Controlled Group under the
terms of the plan or of any collective bargaining agreement or by
applicable law; neither the Company nor any member of the
Controlled Group has withdrawn or partially withdrawn from any
Multiemployer Pension Plan, incurred any withdrawal liability
with respect to any such plan or received notice of any claim or
demand for withdrawal liability or partial withdrawal liability
from any such plan, and no condition has occurred which, if
continued, might result in a withdrawal or partial withdrawal
from any such plan; and neither the Company nor any member of the
Controlled Group has received any notice that any Multiemployer
Pension Plan is in reorganization, that increased contributions
may be required to avoid a reduction in plan benefits or the
imposition of any excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the
Code, that any such plan is or may be terminated, or that any
such plan is or may become insolvent.
9.10 Investment Company Act. Neither the Company nor any Subsidiary is an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940.
9.11 Public Utility Holding Company Act. Neither the Company nor any
Subsidiary is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935.
9.12 Regulation U. The Company is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
9.13 Taxes. Each of the Company and each Subsidiary has filed all tax
returns and reports required by law to have been filed by it and has paid all
taxes and governmental charges thereby shown to be owing, except any such taxes
or charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.
39
9.14 Solvency, etc. On the Restatement Effective Date, and immediately
prior to and after giving effect to the issuance of each Letter of Credit and
each borrowing hereunder and the use of the proceeds thereof: (a) the Company's
and each other Loan Party's assets will exceed its liabilities and (b) the
Company and each other Loan Party will be Solvent.
9.15 Environmental Matters.
(a) No Violations. Except as set forth on Schedule 9.15,
neither the Company nor any Subsidiary, nor any operator of the
Company's or any Subsidiary's properties, is in violation, or
alleged violation, of any judgment, decree, order, law, permit,
license, rule or regulation pertaining to Environmental Matters,
including those arising under the Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 or any other
Environmental Law which: (i) in any single case, requires
expenditures in any three (3) year period of $50,000 or more by
the Company and its Subsidiaries in penalties and/or for
investigative, removal or remedial actions or (ii) individually
or in the aggregate otherwise might reasonably be expected to
have a Material Adverse Effect.
(b) Notices. Except as set forth on Schedule 9.15 and for
matters arising after the Original Closing Date, in each case
none of which could singly or in the aggregate be expected to
have a Material Adverse Effect, neither the Company nor any
Subsidiary has received notice from any third party, including
any Federal, state or local governmental authority: (i) that any
one (1) of them has been identified by the U.S. Environmental
Protection Agency as a potentially responsible party under CERCLA
with respect to a site listed on the National Priorities List, 40
C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (ii) that any hazardous waste, as
defined by 42 U.S.C.ss.6903(5), any hazardous substance as
defined by 42 U.S.C.ss.9601(14), any pollutant or contaminant as
defined by 42 U.S.C.ss.9601(33) or any toxic substance, oil or
hazardous material or other chemical or substance regulated by
any Environmental Law (all of the foregoing, "Hazardous
Substances") which any one (1) of them has generated, transported
or disposed of has been found at any site at which a Federal,
state or local agency or other third party has conducted a
remedial investigation, removal or other response action pursuant
to any Environmental Law; (iii) that the Company or any
Subsidiary must conduct a remedial investigation, removal,
response action or other activity pursuant to any Environmental
Law; or (iv) of any Environmental Claim.
(c) Handling of Hazardous Substances. Except as set forth on
Schedule 9.15: (i) no portion of the real property or other
assets of the Company or any Subsidiary has been used for the
handling, processing, storage or disposal of Hazardous Substances
except in accordance in all material respects with applicable
Environmental Laws; and no underground tank or other underground
storage receptacle for Hazardous Substances is located on such
properties; (ii) in the course of any activities conducted by the
Company, any Subsidiary or the operators of any
40
real property of the Company or any Subsidiary, no Hazardous
Substances have been generated or are being used on such
properties except in accordance in all material respects with
applicable Environmental Laws; (iii) there have been no
unpermitted or unauthorized Releases or threatened Releases of
Hazardous Substances on, upon, into or from any real property or
other assets of the Company or any Subsidiary, which Releases
singly or in the aggregate might reasonably be expected to have a
Material Adverse Effect on the value of such real property or
assets; (iv) there have been no Releases on, upon, from or into
any real property in the vicinity of the real property or other
assets of the Company or any Subsidiary which, through soil or
groundwater contamination, may have come to be located on, and
which might reasonably be expected to have a Material Adverse
Effect on the value of, the real property or other assets of the
Company or any Subsidiary; and (v) any Hazardous Substances
generated by the Company and its Subsidiaries have been
transported offsite only by properly licensed carriers and
delivered, to the knowledge of the Company and its Subsidiaries,
only to treatment or disposal facilities maintaining valid
permits as required under applicable Environmental Laws, which
transporters and facilities, to the knowledge of the Company and
its Subsidiaries, have been and are operating in compliance in
all material respects with such permits and applicable
Environmental Laws.
9.16 Reserved.
9.17 Insurance. Set forth on Schedule 9.17 is a complete and accurate
summary of the property and casualty insurance program of the Company and its
Subsidiaries as of the Restatement Effective Date (including the names of all
insurers, policy numbers, expiration dates, amounts and types of coverage,
annual premiums, deductibles, self-insured retention, and a description in
reasonable detail of any self-insurance program, retrospective rating plan,
fronting arrangement or other risk assumption arrangement involving the Company
or any Subsidiary).
9.18 Real Property. Set forth on Schedule 9.18 is a complete and accurate
list, as of the Restatement Effective Date, of the addresses of all real
property held through fee ownership, leasehold or easement title by the Company
or any Subsidiary, together with, in the case of leased property, the name and
mailing address of the lessor of such property.
9.19 Information. All information heretofore or contemporaneously herewith
furnished in writing by the Company or any other Loan Party to the Agent or any
Bank for purposes of or in connection with this Agreement and the transactions
contemplated hereby is, and all written information hereafter furnished by or on
behalf of the Company or any Subsidiary to the Agent or any Bank pursuant hereto
or in connection herewith will be, true and accurate in every material respect
on the date as of which such information is dated or certified, and none of such
information is or will be incomplete by omitting to state any material fact
necessary to make such information not misleading in light of the circumstances
under which made (it being recognized by the Agent and the Banks that any
projections and forecasts provided by the Company are based on good faith
estimates and assumptions believed by the Company to be reasonable as of the
date of the applicable projections or assumptions and that actual results during
the period or periods covered by any such projections and forecasts may differ
from projected or forecasted results).
41
9.20 Intellectual Property. The Company and each Subsidiary owns and
possesses or has a license or other right to use all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, service marks,
service ▇▇▇▇ rights and copyrights as are necessary for the conduct of the
business of the Company and its Subsidiaries, without any infringement upon
rights of others which could reasonably be expected to have a Material Adverse
Effect.
9.21 Burdensome Obligations. Neither the Company nor any Subsidiary is a
party to any agreement or contract or subject to any corporate or partnership
restriction which might reasonably be expected to have a Material Adverse
Effect.
9.22 Labor Matters. Except as set forth on Schedule 9.22, neither the
Company nor any Subsidiary is subject to any labor or collective bargaining
agreement. There are no existing or threatened strikes, lockouts or other labor
disputes involving the Company or any Subsidiary that singly or in the aggregate
could reasonably be expected to have a Material Adverse Effect. Hours worked by
and payment made to employees of the Company and its Subsidiaries are not in
violation of the Fair Labor Standards Act or any other applicable law, rule or
regulation dealing with such matters.
9.23 No Default. No Event of Default or Unmatured Event of Default exists
or would result from the incurring by the Company of any Debt hereunder or under
any other Loan Document.
9.24 Foreign Assets Control Regulations and Anti-Money Laundering.
(a) OFAC. Neither the Company nor any of its Subsidiaries:
(i) is a Person whose property or interest in property is blocked
or subject to blocking pursuant to Section 1 of Executive Order
13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)); (ii) engages in
any dealings or transactions prohibited by Section 2 of such
executive order, or is otherwise associated with any such Person
in any manner violative of Section 2; or (iii) is a Person on the
list of Specially Designated Nationals and Blocked Persons or
subject to the limitations or prohibitions under any other U.S.
Department of Treasury's Office of Foreign Assets Control
regulation or executive order.
(b) Patriot Act. The Company and each of its Subsidiaries
are in compliance, in all material respects, with the Patriot
Act. No part of the proceeds of the Loans will be used, directly
or indirectly, for any payments to any governmental official or
employee, political party, official of a political party,
candidate for political office, or anyone else acting in an
official capacity, in order to obtain, retain or direct business
or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.
9.25 Capitalization. Schedule 9.25 sets forth the authorized equity
securities of each Loan Party as of the date hereof. All issued and outstanding
equity securities of each Loan Party are duly authorized and validly issued,
fully paid, non-assessable, and, other than with respect to the capital stock of
the Company, free and clear of all Liens. All such securities were issued in
42
compliance with all applicable state and federal laws concerning the issuance of
securities. All of the issued and outstanding equity securities of each Loan
Party are owned in the amounts and by the Persons as set forth in such Schedule
9.25. Except as otherwise set forth on Schedule 9.25, there are no pre-emptive
or other outstanding rights, options, warrants, conversion rights or other
similar agreements or understandings for the purchase or acquisition of any
equity securities in any such entity.
SECTION 10. COVENANTS.
Until the expiration or termination of the Commitments and thereafter until
all obligations of the Company hereunder and under the other Loan Documents are
paid in full and all Letters of Credit have been terminated, the Company agrees
that, unless at any time the Required Banks shall otherwise expressly consent in
writing, it will:
10.1 Reports, Certificates and Other Information. Furnish to the Agent and
each Bank:
10.1.1 Annual Report. Promptly when available and in any event
within ninety (90) days after the close of each Fiscal Year: (a) a
copy of the annual audit report of the Company and its Subsidiaries
for such Fiscal Year, including therein consolidated balance sheets
and statements of earnings and cash flows of the Company and its
Subsidiaries as at the end of such Fiscal Year, certified without
qualification by Deloitte & Touche or other independent auditors of
recognized standing selected by the Company and reasonably acceptable
to the Required Banks, together with: (i) a written statement from
such accountants to the effect that in making the examination
necessary for the signing of such annual audit report by such
accountants, nothing came to their attention that caused them to
believe that the Company was not in compliance with any provision of
Section 10.6, 10.7, 10.9 or 10.10 of this Agreement insofar as such
provision relates to accounting matters or, if something has come to
their attention that caused them to believe that the Company was not
in compliance with any such provision, describing such non-compliance
in reasonable detail and (ii) a comparison with the budget for such
Fiscal Year and a comparison with the previous Fiscal Year; and (b)
consolidating balance sheets of the Company and its Subsidiaries as of
the end of such Fiscal Year and a consolidating statement of earnings
for the Company and its Subsidiaries for such Fiscal Year, certified
by a Responsible Officer of the Company.
10.1.2 Interim Reports.
(a) Promptly when available and in any event within forty
five (45) days after the end of each Fiscal Quarter (except the
last Fiscal Quarter of each Fiscal Year), consolidated and
consolidating balance sheets of the Company and its Subsidiaries
as of the end of such Fiscal Quarter, together with consolidated
and consolidating statements of earnings and cash flows for such
Fiscal Quarter and for the period beginning with the first day of
such Fiscal Year and ending on the last day of such Fiscal
Quarter, together with a comparison with the corresponding period
of
43
the previous Fiscal Year and a comparison with the budget for
such period of the current Fiscal Year, certified by a
Responsible Officer of the Company; and
(b) promptly when available and in any event within thirty
(30) days after the end of each month (except the last month of
each Fiscal Quarter), consolidated and consolidating balance
sheets of the Company and its Subsidiaries as of the end of such
month, together with consolidated and consolidating statements of
earnings and a consolidated statement of cash flows for such
month and for the period beginning with the first day of such
Fiscal Year and ending on the last day of such month, together
with a comparison with the corresponding period of the previous
Fiscal Year and a comparison with the budget for such period of
the current Fiscal Year, certified by a Responsible Officer of
the Company.
10.1.3 Compliance Certificates. Contemporaneously with the
furnishing of a copy of each annual audit report pursuant to Section
10.1.1 and each set of quarterly statements pursuant to Section
10.1.2, a duly completed compliance certificate in the form of Exhibit
B, with appropriate insertions, dated the date of such annual report
or such quarterly statements and signed by a Responsible Officer of
the Company, containing a computation of each of the financial ratios
and restrictions set forth in Section 10.6 and a statement to the
effect that such officer has not become aware of any Event of Default
or Unmatured Event of Default that has occurred and is continuing or,
if there is any such event, describing it and the steps, if any, being
taken to cure it.
10.1.4 Reports to the SEC and to Shareholders. Promptly upon the
filing or sending thereof, copies of all regular, periodic or special
reports of the Company or any Subsidiary filed with the SEC; copies of
all registration statements of the Company or any Subsidiary filed
with the SEC (other than on Form S-8); and copies of all proxy
statements or other communications made to security holders generally.
10.1.5 Notice of Default, Litigation and ERISA Matters. Promptly
upon becoming aware of any of the following, written notice describing
the same and the steps being taken by the Company or the Subsidiary
affected thereby with respect thereto:
(a) the occurrence of an Event of Default or an Unmatured
Event of Default;
(b) any litigation, arbitration or governmental
investigation or proceeding not previously disclosed by the
Company to the Banks which has been instituted or, to the
knowledge of the Company, is threatened against the Company or
any Subsidiary or to which any of the properties of any thereof
is subject which might reasonably be expected to have a Material
Adverse Effect;
(c) the institution of any steps by any member of the
Controlled Group or any other Person to terminate any Pension
Plan, or the failure of any member of the Controlled Group to
make a required contribution to any Pension Plan (if such failure
is sufficient to give rise to a Lien under Section 302(f) of
ERISA) or to any Multiemployer Pension Plan, or the taking of any
action with respect to a Pension
44
Plan which could result in the requirement that the Company
furnish a bond or other security to the PBGC or such Pension
Plan, or the occurrence of any event with respect to any Pension
Plan or Multiemployer Pension Plan which could result in the
incurrence by any member of the Controlled Group of any material
liability, fine or penalty (including any claim or demand for
withdrawal liability or partial withdrawal from any Multiemployer
Pension Plan), or any material increase in the contingent
liability of the Company with respect to any post-retirement
welfare plan benefit, or any notice that any Multiemployer
Pension Plan is in reorganization, that increased contributions
may be required to avoid a reduction in plan benefits or the
imposition of an excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the
Code, that any such plan is or may be terminated, or that any
such plan is or may become insolvent;
(d) any cancellation or material change in any insurance
maintained by the Company or any Subsidiary; or
(e) any other event (including: (i) any violation of any
Environmental Law or the assertion of any Environmental Claim or
(ii) the enactment or effectiveness of any law, rule or
regulation) which might reasonably be expected to have a Material
Adverse Effect.
10.1.6 Borrowing Base Certificates. Within thirty (30) days of
the end of each month, a Borrowing Base Certificate dated as of the
end of such month and executed by a Responsible Officer of the Company
on behalf of the Company; provided: (i) the Company may deliver a
Borrowing Base Certificate more frequently if it chooses and (ii) at
any time an Event of Default exists, the Agent may require the Company
to deliver Borrowing Base Certificates more frequently.
10.1.7 Management Reports. Promptly upon the request of the Agent
or any Bank, copies of all detailed financial and management reports
submitted to the Company by independent auditors in connection with
each annual or interim audit made by such auditors of the books of the
Company.
10.1.8 Projections. As soon as practicable, and in any event
within thirty (30) days prior to the commencement of each Fiscal Year,
financial projections for the Company and its Subsidiaries for such
Fiscal Year (including an operating budget and a cash flow budget)
prepared in a manner consistent with the projections delivered by the
Company to the Banks prior to the Original Closing Date or otherwise
in a manner reasonably satisfactory to the Agent, accompanied by a
certificate of a Responsible Officer of the Company on behalf of the
Company to the effect that: (i) such projections were prepared by the
Company in good faith, (ii) the Company has a reasonable basis for the
assumptions contained in such projections and (iii) such projections
have been prepared in accordance with such assumptions.
10.1.9 Subordinated Debt, Pari Passu Debt and New Equity Infusion
Notices. Promptly from time to time, copies of any notices (including
notices of default or
45
acceleration) received from any holder or trustee of, under or with
respect to any Subordinated Debt, Pari Passu Debt or New Equity
Infusion Documents.
10.1.10 Reserved.
10.1.11 Other Information. Promptly from time to time, such other
information concerning the Company and its Subsidiaries as any Bank or
the Agent may reasonably request.
10.2 Books, Records and Inspections. Keep, and cause each Subsidiary to
keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each Subsidiary to permit, any Bank or the Agent or any
representative thereof to inspect the properties and operations of the Company
or such Subsidiary; and permit, and cause each Subsidiary to permit, at any
reasonable time and with reasonable notice (or at any time without notice if an
Event of Default exists), any Bank or the Agent or any representative thereof to
visit any or all of its offices, to discuss its financial matters with its
officers and its independent auditors (and the Company hereby authorizes such
independent auditors to discuss such financial matters with any Bank or the
Agent or any representative thereof), and to examine (and, at the expense of the
Company or the applicable Subsidiary, photocopy extracts from) any of its books
or other records; and permit, and cause each Subsidiary to permit, the Agent and
its representatives to inspect the Inventory and other tangible assets of the
Company or such Subsidiary, to perform appraisals of the equipment of the
Company or such Subsidiary, and to inspect, audit, check and make copies of and
extracts from the books, records, computer data, computer programs, journals,
orders, receipts, correspondence and other data relating to Inventory, Accounts
Receivable and any other Collateral. All such inspections or audits by the Agent
shall be at the Company's expense.
10.3 Maintenance of Property; Insurance.
(a) Keep, and cause each Subsidiary to keep, all property
useful and necessary in the business of the Company or such
Subsidiary in good working order and condition, ordinary wear and
tear excepted.
(b) Maintain, and cause each Subsidiary to maintain, with
responsible insurance companies, such insurance as may be
required by any law or governmental regulation or court decree or
order applicable to it and such other insurance, to such extent
and against such hazards and liabilities, as is customarily
maintained by companies similarly situated, but which shall
insure against all risks and liabilities of the type identified
on Schedule 9.17 and shall have insured amounts no less than, and
deductibles no higher than, those set forth on such schedule;
and, upon request of the Agent or any Bank, furnish to the Agent
or such Bank a certificate setting forth in reasonable detail the
nature and extent of all insurance maintained by the Company and
its Subsidiaries. The Company shall cause each issuer of an
insurance policy to provide the Agent with an endorsement: (i)
Agent as loss payee with respect to each policy of property or
casualty insurance naming the Agent and each Bank as an
additional insured with respect to each policy of insurance for
liability for personal injury or property damage, (ii) providing
that thirty (30) days notice will be
46
given to the Agent prior to any cancellation of, material
reduction or change in coverage provided by or other material
modification to such policy and (iii) reasonably acceptable in
all other respects to the Agent. The Company shall execute and
deliver to the Agent a collateral assignment, in form and
substance satisfactory to the Agent, of each business
interruption insurance policy maintained by the Company.
(c) UNLESS THE COMPANY PROVIDES THE AGENT WITH EVIDENCE OF
THE INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT, THE AGENT MAY
PURCHASE INSURANCE AT THE COMPANY'S EXPENSE TO PROTECT THE
AGENT'S AND THE BANKS' INTERESTS IN THE COLLATERAL. THIS
INSURANCE MAY, BUT NEED NOT, PROTECT THE COMPANY'S INTERESTS. THE
COVERAGE THAT THE AGENT PURCHASES MAY NOT PAY ANY CLAIM THAT IS
MADE AGAINST THE COMPANY IN CONNECTION WITH THE COLLATERAL. THE
COMPANY MAY LATER CANCEL ANY INSURANCE PURCHASED BY THE AGENT,
BUT ONLY AFTER PROVIDING THE AGENT WITH EVIDENCE THAT THE COMPANY
HAS OBTAINED INSURANCE AS REQUIRED BY THIS AGREEMENT. IF THE
AGENT PURCHASES INSURANCE FOR THE COLLATERAL, THE COMPANY WILL BE
RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING INTEREST
AND ANY OTHER CHARGES THAT MAY BE IMPOSED WITH THE PLACEMENT OF
THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR
EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE
ADDED TO THE PRINCIPAL AMOUNT OF THE LOANS OWING HEREUNDER. THE
COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF THE INSURANCE
THE COMPANY MAY BE ABLE TO OBTAIN ON ITS OWN.
10.4 Compliance with Laws; Payment of Taxes and Liabilities.
(a) Comply, and cause each Subsidiary to comply, in all
material respects with all applicable laws, rules, regulations,
decrees, orders, judgments, licenses and permits, except where
failure to comply could not reasonably be expected to have a
Material Adverse Effect; and
(b) Pay, and cause each Subsidiary to pay, prior to
delinquency, all taxes and other governmental charges against it
or any of its property, as well as claims of any kind which, if
unpaid, might become a Lien on any of its property; provided; the
foregoing shall not require the Company or any Subsidiary to pay
any such tax or charge so long as it shall contest the validity
thereof in good faith by appropriate proceedings and shall set
aside on its books adequate reserves with respect thereto in
accordance with GAAP.
10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject to
Section 10.11) cause each Subsidiary to maintain and preserve: (a) its existence
and good standing
47
in the jurisdiction of its organization and (b) its qualification to do
business and good standing in each jurisdiction where the nature of its business
makes such qualification necessary (except in those instances in which the
failure to be qualified or in good standing does not have a Material Adverse
Effect).
10.6 Financial Covenants.
10.6.1 Interest Coverage Ratio. Not permit the Interest Coverage
Ratio for any Computation Period to be less than 2.00 to 1.00 as of
the last day of any Fiscal Quarter.
10.6.2 Total Debt to Capital Ratio. Not permit the Total Debt to
Capital Ratio as of the last day of any Fiscal Quarter to exceed 0.65
to 1.00.
10.6.3 VaR and Open Positions. Not permit the sum of VaR and Open
Positions to exceed $1,000,000 at any time.
10.6.4 Capital Expenditures. Not permit the aggregate amount of
all Capital Expenditures made by the Company and its Subsidiaries in
any Fiscal Year to exceed $5,000,000.00.
10.7 Limitations on Debt. Not, and not permit any Subsidiary to, create,
incur, assume or suffer to exist any Debt, except:
(a) obligations under this Agreement and the other Loan
Documents;
(b) Debt secured by Liens permitted by subsection 10.8(d),
and extensions, renewals and refinancings thereof; provided that
the aggregate amount of all such Debt at any time outstanding
shall not exceed $250,000;
(c) Debt of Subsidiaries to the Company;
(d) unsecured Debt of the Company to Subsidiaries;
(e) (i) Subordinated Debt; and (ii) the Pari Passu Debt;
(f) Hedging Obligations incurred for bona fide hedging
purposes and not for speculation, provided, that any such Hedging
Obligations shall be pursuant to Hedging Agreement entered into
by the Company or any of its Subsidiaries with one or more of the
Banks party hereto, provided further, that if all of the Banks
fail to offer the Company or its Subsidiaries (as applicable) a
market rate with respect to any proposed Hedging Agreement, the
Company or its Subsidiaries (as applicable) may enter into such a
Hedging Agreement on an unsecured basis with a third party, and
on terms, reasonably satisfactory to Agent;
(g) Debt described on Schedule 10.7 and any extension,
renewal or refinancing thereof so long as the principal amount
thereof is not increased;
(h) other Debt, in addition to the Debt listed above, in an
aggregate amount not at any time exceeding $500,000.
48
10.8 Liens. Not, and not permit any Subsidiary to, create or permit to
exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except:
(a) Liens for taxes or other governmental charges not at the
time delinquent or thereafter payable without penalty or being
contested in good faith by appropriate proceedings and, in each
case, for which it maintains adequate reserves;
(b) Liens arising in the ordinary course of business (such
as: (i) Liens of carriers, warehousemen, mechanics and
materialmen and other similar Liens imposed by law and (ii) Liens
incurred in connection with worker's compensation, unemployment
compensation and other types of social security (excluding Liens
arising under ERISA) or in connection with surety bonds, bids,
performance bonds and similar obligations) for sums not overdue
or being contested in good faith by appropriate proceedings and
not involving any deposits or advances or borrowed money or the
deferred purchase price of property or services and, in each
case, for which it maintains adequate reserves;
(c) Liens described on Schedule 10.8;
(d) subject to the limitation set forth in subsection
10.7(b): (i) Liens arising in connection with Capital Leases (and
attaching only to the property being leased), (ii) Liens existing
on property at the time of the acquisition thereof by the Company
or any Subsidiary (and not created in contemplation of such
acquisition) and (iii) Liens that constitute purchase money
security interests on any property securing debt incurred for the
purpose of financing all or any part of the cost of acquiring
such property; provided, any such Lien attaches to such property
within sixty (60) days of the acquisition thereof and attaches
solely to the property so acquired;
(e) attachments, appeal bonds, judgments and other similar
Liens, for sums not exceeding $250,000 arising in connection with
court proceedings, provided, execution or other enforcement of
such Liens is effectively stayed and the claims secured thereby
are being actively contested in good faith and by appropriate
proceedings;
(f) easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens not interfering
in any material respect with the ordinary conduct of the business
of the Company or any Subsidiary;
(g) Liens arising under the Loan Documents;
(h) any other Liens securing Debt which do not exceed an
aggregate amount of $500,000; and
(i) the replacement, extension or renewal of any Lien
permitted by clauses (c) or (h) above upon or in the same
property theretofore subject thereto
49
arising out of the extension, renewal or replacement of the Debt
secured thereby (without increase in the amount thereof).
10.9 Operating Leases. Not permit the aggregate amount of all rental
payments under Operating Leases made (or scheduled to be made) by the Company
and its Subsidiaries (on a consolidated basis) to exceed $250,000 in any Fiscal
Year.
10.10 Restricted Payments. Not, and not permit any Subsidiary to: (a) make
any distribution to any of its shareholders, (b) purchase or redeem any of its
capital stock or other equity interests or any warrants, options or other rights
in respect thereof, (c) pay any management fees or similar fees to any of its
shareholders or any Affiliate thereof, (d) make any redemption, prepayment,
defeasance or repurchase of any Subordinated Debt or Pari Passu Debt, other than
at regularly-scheduled times (without giving effect to mandatory prepayment,
acceleration or similar provisions), or (e) set aside funds for any of the
foregoing. Notwithstanding the foregoing any Subsidiary may pay dividends or
make other distributions to the Company or to a Wholly-Owned Subsidiary and,
provided each of the following conditions are met, the Company may declare and
pay a dividend once each Fiscal Quarter to its shareholders: (x) if such
payment, when added to all other such payments made during the three Fiscal
Quarters immediately preceding the fiscal Quarter in which such dividend is
declared and paid, will not exceed sixty percent (60%) of the Consolidated Net
Income for the four Fiscal Quarters immediately preceding the Fiscal Quarter in
which such dividend is declared and paid; (y) no Unmatured Event of Default or
Event of Default has occurred or would occur after giving effect to such
dividend, and (z) after giving effect to the declaration and payment of such
dividend, the Company is in compliance with the financial covenants set forth in
Section 10.6, as computed for the most recent Fiscal Quarter for which financial
statements have been (and are required to be) delivered hereunder.
10.11 Mergers, Consolidations, Sales. Not, and not permit any Subsidiary
to, be a party to any merger or consolidation, or purchase or otherwise acquire
all or substantially all of the assets or any stock of any class of, or any
partnership or joint venture interest in, any other Person, or, except in the
ordinary course of its business, sell, transfer, convey or lease all or any
substantial part of its assets, or sell or assign with or without recourse any
receivables, except for: (a) any such merger, consolidation, sale, transfer,
conveyance, lease or assignment of or by any Wholly-Owned Subsidiary into the
Company or into, with or to any other Wholly-Owned Subsidiary; (b) any such
purchase or other acquisition by the Company or any Wholly-Owned Subsidiary of
the assets or stock of any Wholly-Owned Subsidiary; and (c) sales and
dispositions of assets (including the stock of Subsidiaries) for at least fair
market value (as determined by the Board of Directors of the Company) so long as
the net book value of all assets sold or otherwise disposed of in any Fiscal
Year (other than Inventory sold in the ordinary course of business and in
accordance with past practices) does not exceed five percent (5%) of the net
book value of the consolidated assets of the Company and its Subsidiaries as of
the last day of the preceding Fiscal Year.
10.12 Modification of Organizational Documents. Not permit the Certificate
or Articles of Incorporation, Bylaws or other organizational documents of the
Company or any Subsidiary
50
to be amended or modified in any way which might reasonably be expected to
materially adversely affect the interests of the Banks.
10.13 Use of Proceeds. Use the proceeds of the Loans, and the Letters of
Credit, solely to finance working capital needs and other general corporate
purposes of the Company and its Subsidiaries; and in no event use or permit any
proceeds of any Loan to be used, either directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of "purchasing or carrying" any
Margin Stock.
10.14 Further Assurances. Take, and cause each Subsidiary to take, such
actions as are necessary or as the Agent or the Required Banks may reasonably
request from time to time (including the execution and delivery of guaranties,
security agreements, pledge agreements, mortgages, deeds of trust, financing
statements and other documents, the filing or recording of any of the foregoing,
and the delivery of stock certificates and other Collateral with respect to
which perfection is obtained by possession) to ensure that: (a) the obligations
of the Company hereunder and under the other Loan Documents: (i) are secured by
substantially all of the assets of the Company; and (ii) guaranteed by all of
its Subsidiaries (including, promptly upon the acquisition or creation thereof,
any Subsidiary acquired or created after the date hereof) by execution of a
counterpart of the Guaranty and (b) the obligations of each Subsidiary under the
Guaranty are secured by substantially all of the assets of such Subsidiary.
Notwithstanding the foregoing, in no event shall the Company or any of its
Subsidiaries be obligated to (i) obtain or deliver control agreements in favor
of the Agent with respect to deposit accounts in which, taken in the aggregate,
the amount of funds on deposit do not exceed: (A) from the Restatement Effective
Date through July 20, 3004, $1,500,000 for more than five (5) consecutive
Business Days or (B) thereafter, $500,000 for more than three (3) consecutive
Business Days, or (ii) obtain or deliver landlord lien waivers or estoppels with
respect to any property where the fair market value of the Collateral located
thereon does not exceed $50,000 for more than three (3) consecutive Business
Days.
10.15 Transactions with Affiliates. Not, and not permit any Subsidiary to,
enter into, or cause, suffer or permit to exist any transaction, arrangement or
contract with any of its other Affiliates (other than the Company and its
Subsidiaries) which is on terms that are less favorable than are obtainable from
any Person which is not one (1) of its Affiliates.
10.16 Employee Benefit Plans. Maintain, and cause each Subsidiary to
maintain, each Pension Plan in substantial compliance with all applicable
requirements of law and regulations.
10.17 Environmental Matters.
(a) If any Release or Disposal of Hazardous Substances shall
occur or shall have occurred on any real property or any other
assets of the Company or any Subsidiary, the Company shall, or
shall cause the applicable Subsidiary to, cause the prompt
containment and removal of such Hazardous Substances and the
remediation of such real property or other assets as necessary to
comply with all Environmental Laws and to preserve the value of
such real property or other assets. Without limiting the
generality of the foregoing, the Company shall, and shall cause
each
51
Subsidiary to, comply with any valid Federal or state judicial or
administrative order requiring the performance at any real
property of the Company or any Subsidiary of activities in
response to the Release or threatened Release of a Hazardous
Substance.
(b) To the extent that the transportation of "hazardous
waste" as defined by RCRA is permitted by this Agreement, the
Company shall, and shall cause its Subsidiaries to, dispose of
such hazardous waste only at licensed disposal facilities
operating in compliance with Environmental Laws.
10.18 Unconditional Purchase Obligations. Not, and not permit any
Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services if such contract requires that
payment be made by it regardless of whether delivery is ever made of such
materials, supplies or other property or services, other than contracts entered
into in the ordinary course of business and in accordance with past practices.
10.19 Inconsistent Agreements. Not, and not permit any Subsidiary to, enter
into any agreement containing any provision which would: (a) be violated or
breached by any borrowing by the Company hereunder or by the performance by the
Company or any Subsidiary of any of its obligations hereunder or under any other
Loan Document, (b) prohibit the Company or any Subsidiary from granting to the
Agent, for the benefit of the Banks, a Lien on any of its assets, or (c) create
or permit to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary to: (i) pay dividends or make other distributions to
the Company or any other applicable Subsidiary, or pay any Debt owed to the
Company or any other Subsidiary, (ii) make loans or advances to the Company or
(iii) transfer any of its assets or properties to the Company.
10.20 Business Activities. Not, and not permit any Subsidiary to, engage in
any line of business other than the businesses engaged in on the date hereof and
businesses reasonably related thereto.
10.21 Investments. Not, and not permit any Subsidiary to, make or permit to
exist any Investment in any other Person, or maintain any master, operating,
disbursement, payroll, ▇▇▇▇▇ cash, deposit, checking, savings, money market
investments, certificates of deposits, securities or any other account with any
Person, except (without duplication) the following:
(a) contributions by the Company to the capital of any of
its Subsidiaries, or by any such Subsidiary to the capital of any
of its Subsidiaries;
(b) in the ordinary course of business, Investments by the
Company in any Subsidiary or by any Subsidiary in the Company, by
way of intercompany loans, advances or guaranties, all to the
extent permitted by Section 10.7;
(c) Suretyship Liabilities permitted by Section 10.7;
(d) Cash Equivalent Investments;
(e) bank deposits in the ordinary course of business;
provided, the aggregate amount of all such deposits (excluding
amounts in payroll accounts) which
52
are maintained with any bank other than a Bank shall not exceed
$500,000 for any period of three (3) consecutive days;
(f) Investments in securities of account debtors received
pursuant to any plan of reorganization or similar arrangement
upon the bankruptcy or insolvency of such account debtors; and
(g) Investments listed on Schedule 10.21;
provided: (x) any Investment which when made complies with the requirements of
the definition of the term "Cash Equivalent Investment" may continue to be held
notwithstanding that such Investment if made thereafter would not comply with
such requirements; (y) no Investment otherwise permitted by clause (b), (c), or
(g) shall be permitted to be made if, immediately before or after giving effect
thereto, any Event of Default or Unmatured Event of Default exists.
10.22 Restriction of Amendments to Certain Documents. Not amend or
otherwise modify, or waive any rights under, any of the Subordinated Debt
Documents, Pari Passu Debt Documents, Turkey Vulture Settlement Documents or New
Equity Infusion Documents without the prior written consent of Agent and the
Banks, which consent shall be given in their sole discretion.
10.23 Fiscal Year. Not change its Fiscal Year.
10.24 Cancellation of Debt. Not, and not permit any Subsidiary to (i)
cancel any claim or debt owing to it, except for reasonable consideration or in
the ordinary course of business, and except for the cancellation of debts, or
(ii) cancel, settle or otherwise waive any rights in respect of any Existing
Claim except any settlement or waiver determined by the Company or such
Subsidiary to be advantageous to or in the best interests of the Company or such
Subsidiary in its reasonable business judgment. During the existence of any
Event of Default, upon the request of the Agent, the Company shall, and shall
cause each Subsidiary to, do, take, execute and deliver any and all actions,
steps, documents, agreements and instruments as the Agent may require to assign
to the Agent, for the benefit of the Bank Parties, and grant a first priority
Lien in favor of the Agent, for the benefit of the Bank Parties, on, all rights,
title, interest and proceeds of the Existing Claims, including, without
limitation, all steps necessary to effectuate such assignment in accordance with
the Assignment of Claims Act of 1940.
10.25 Foreign Subsidiaries. Anything contained in this Agreement to the
contrary notwithstanding, not, and not permit any Subsidiary to, invest, create
or otherwise permit to exist any Subsidiary that is not organized, formed or
existing under the laws of a State of the United Sates.
10.26 New Equity Infusion. Cause each of the following to occur on or
before September 30, 2004: (i) consummation of all New Equity Infusions, on
terms and conditions and pursuant to New Equity Infusion Documents satisfactory
to Agent and the Banks in their discretion and otherwise in accordance with the
terms of this Agreement, which provide the Company with Net Cash Proceeds of an
amount equal to or greater than $2,000,000; (ii) payment in full of Term Loan B,
together with all interest, fees, costs and expenses which have arisen or
53
accrued but remain unpaid with respect thereto, with proceeds of New Equity
Infusions; and (iii) deliver copies of the New Equity Infusion Documents to
Agent, certified as being true, correct and complete copies thereof by a
Responsible Officer of the Company.
10.27 Interest Rate Protection. Enter into, not later than one hundred and
eighty (180) days after the Restatement Effective Date, an interest rate
protection mechanism with a term extending through the Term Loan A Termination
Date to hedge the interest rate with respect to not less than 50% of the
principal amount of the Term Loan A in form and substance reasonably
satisfactory to the Agent pursuant to a Hedging Agreement or Agreements between
the Company and one or more of the Banks party hereto, provided, that if all of
the Banks fail to offer the Company a market rate with respect to any such
required Hedging Agreement, the Company may enter into such a Hedging Agreement
or Agreements on an unsecured basis with a third party, and on terms, reasonably
satisfactory to Agent
10.28 OFAC, Etc. Neither the Company nor any of its Subsidiaries: (a) will
become a Person whose property or interests in property are blocked or subject
to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit or Support Terrorism (66 Fed. Reg. 49079(2001); (b) will engage in any
dealings or transactions prohibited by Section 2 of such executive order, or be
otherwise associated with any such Person in any manner volatile of such Section
2; or (c) will otherwise become a Person on the list of Specially Designated
Nationals and Blocked Persons or subject to the limitations or prohibitions
under any other OFAC regulation or executive order.
SECTION 11. EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
The obligation of each Bank to make its Loans and of the Issuing Bank to
issue Letters of Credit is subject to the following conditions precedent:
11.1 Initial Credit Extension. The obligation of the Banks to make any
initial Loans and the obligation of the Issuing Bank to issue any initial Letter
of Credit (whichever first occurs) is, in addition to the conditions precedent
specified in Section 11.2, subject to the conditions precedent that the Agent
shall have received all of the following, each duly executed and dated the
Restatement Effective Date (or such earlier date as shall be satisfactory to the
Agent), in form and substance satisfactory to the Agent (and the date on which
all such conditions precedent have been satisfied or waived in writing by the
Agent and the Required Banks is called the "Restatement Effective Date"):
11.1.1 Notes. The Notes.
11.1.2 Resolutions. Certified copies of resolutions of the Board
of Directors of the Company authorizing the execution, delivery and
performance by the Company of this Agreement, the Notes and the other
Loan Documents to which the Company is a party; and certified copies
of resolutions of the Board of Directors of each other Loan Party
54
authorizing the execution, delivery and performance by such Loan Party
of each Loan Document to which such entity is a party.
11.1.3 Consents, etc. Certified copies of all documents
evidencing any necessary corporate or partnership action, consents and
governmental approvals (if any) required for the execution, delivery
and performance by the Company and each other Loan Party of the
documents referred to in this Section 11.
11.1.4 Incumbency and Signature Certificates. A certificate of
the Secretary or an Assistant Secretary (or other appropriate
representative) of each Loan Party certifying the names of the officer
or officers of such entity authorized to sign the Loan Documents to
which such entity is a party, together with a sample of the true
signature of each such officer (it being understood that the Agent and
each Bank may conclusively rely on each such certificate until
formally advised by a like certificate of any changes therein).
11.1.5 Guaranty. A counterpart of the Guaranty executed by each
Subsidiary of the Company.
11.1.6 Collateral Documents. Counterparts of the Collateral
Documents executed by the Company and each Subsidiary, as applicable.
11.1.7 Real Estate Documents. With respect to each parcel of real
property owned, leased or otherwise held by the Company or any
Subsidiary, a duly executed Mortgage (or an appropriate amendment to
an already-existing Mortgage, as the case may be) providing for a
fully perfected Lien, in favor of the Agent, in all right, title and
interest of the Company or such Subsidiary in such real property,
together with, in each such case as Agent may require in its sole
discretion:
(a) an ALTA Loan Title Insurance Policy, issued by an
insurer acceptable to the Agent, insuring the Agent's Lien on
such real property as Agent shall designate and containing such
endorsements as the Agent may reasonably require (it being
understood that the amount of coverage, exceptions to coverage
and status of title set forth in such policy shall be acceptable
to the Agent);
(b) copies of all documents of record concerning such real
property as shown on the commitment for the ALTA Loan Title
Insurance Policy referred to above; and
(c) original or certified copies of all insurance policies
required to be maintained with respect to such real property by
this Agreement, the applicable Mortgage or any other Loan
Document.
Additionally, in the case of any leased real property, a consent, in
form and substance satisfactory to the Agent, from the owner and/or
mortgagee (a) consenting to the Mortgage in favor of the Agent with
respect to such property and (b) waiving any landlord's Lien in
respect of personal property kept at the premises subject to such
lease, in each case to the extent the terms of the applicable lease,
in the discretion of Agent, when taken together with the Loan
Documents, require such waiver and/or consent.
55
11.1.8 Opinions of Counsel. Written opinions of law of counsel to
the Company and its Subsidiaries, all in form and substance and
covering such subject matter as is satisfactory to Agent and its
counsel and dated as of the Restatement Effective Date.
11.1.9 Insurance. Evidence satisfactory to the Agent of the
existence of insurance required to be maintained pursuant to
subsection 10.3(b), together with evidence that the Agent has been
named as a lender's loss payee and an additional insured on all
related insurance policies and including business interruption
insurance.
11.1.10 Copies of Documents. Copies, in form and substance
satisfactory to Agent and the Banks and certified by the Secretary of
the Company, of: (a) the Pari Passu Loan Documents, (b) written
consents to the transactions contemplated by the Credit Agreement and
the other Loan Documents from the Montana Public Service Commission
and the Wyoming Public Service Commission, (c) documents regarding the
disputes with Montana Department of Revenue and "PPM" described in
Schedule 9.6, (d) audited consolidated and consolidating financial
statements for: (i) Fiscal Years ending June 30, 2001, June 30, 2002
and June 30, 2003 and (ii) on an interim basis, Fiscal Quarters ending
September 30, 2003 and December 31, 2003 and (e) projected income
statements, balance sheets and cash flow statements for Fiscal Years
ending June 30, 2004 and June 30, 2005, which shall: (i) in both such
cases, be adjusted to give effect to the consummation of the
financings contemplated hereby as if such transactions have already
occurred, consistent in all material respects with the sources and
uses of cash as previously described to the Banks and the forecasts
previously provided to the Banks prepared by the Company and (ii) with
respect to the projections for the Fiscal Year ending June 30, 2004,
be provided on a quarter-by-quarter basis.
11.1.11 Payment of Fees. Evidence of payment by the Company of
all accrued and unpaid fees, costs and expenses to the extent then due
and payable on the Restatement Effective Date, together with all
Attorney Costs of the Agent to the extent invoiced prior to the
Restatement Effective Date plus such additional amounts of Attorney
Costs as shall constitute the Agent's reasonable estimate of Attorney
Costs incurred or to be incurred by the Agent through the closing
proceedings; provided, such estimate shall not thereafter preclude
final settling of accounts between the Company and the Agent.
11.1.12 Solvency Certificate. A Solvency Certificate,
substantially in the form provided and approved by Agent, executed by
a Responsible Officer of the Company.
11.1.13 Pro Forma. A consolidated pro forma balance sheet of the
Company as at January 31, 2004, adjusted to give effect to the
consummation of the financings contemplated hereby as if such
transactions had occurred on such date, consistent in all material
respects with the sources and uses of cash as previously described to
the Banks and the forecasts previously provided to the Banks.
11.1.14 Search Results; Lien Terminations. To the extent required
by the Agent, certified copies of search reports certified by a party
acceptable to the Agent, dated a date reasonably near to the
Restatement Effective Date, listing all effective financing
56
statements which name the Company and each Subsidiary (under their
present names and any previous names) as debtors and which are filed
in the jurisdictions in which filings are to be made pursuant to the
Collateral Documents, together with: (i) copies of such financing
statements, (ii) executed copies of proper UCC termination statements,
if any, necessary to release all Liens and other rights of any Person
in any collateral described in the Collateral Documents previously
granted by any Person (other than Liens permitted by Section 10.8) and
(iii) such other UCC termination statements as the Agent may
reasonably request.
11.1.15 Filings, Registrations and Recordings. The Agent shall
have received each document (including UCC financing statements)
required by the Collateral Documents or under law or reasonably
requested by the Agent to be filed, registered or recorded in order to
create in favor of the Agent, for the benefit of the Banks, a
perfected Lien on the collateral described therein, prior and superior
to any other Person, in proper form for filing, registration or
recording.
11.1.16 Closing Certificate. A certificate signed by a
Responsible Officer of the Company dated as of the Restatement
Effective Date, affirming the matters set forth in Section 11.2.1 as
of the Restatement Effective Date.
11.1.17 Borrowing Base Certificate. A Borrowing Base Certificate
dated as of February 29, 2004.
11.1.18 Certificate, Consents and Permits. Evidence satisfactory
to the Agent that: (i) all necessary governmental, regulatory,
creditor, shareholder, partner and other material consents, approvals
and exemptions required to be obtained by the Company in connection
with the execution, delivery and performance by the Company and its
Subsidiaries under this Agreement and the other Loan Documents have
been duly obtained and are in full force and effect and (ii) all
material permits necessary for the operation of the business have been
obtained.
11.1.19 Other. Such other documents as the Agent or any Bank may
reasonably request.
11.2 Conditions. The obligation: (a) of each Bank to make each Loan and (b)
of the Issuing Bank to issue each Letter of Credit is subject to the following
further conditions precedent that:
11.2.1 Compliance with Warranties, No Default, etc. Both before
and after giving effect to any borrowing and the issuance of any
Letter of Credit, the following statements shall be true and correct:
(a) the representations and warranties of the Company and
each Subsidiary set forth in this Agreement and the other Loan
Documents shall be true and correct in all material respects with
the same effect as if then made (except to the extent stated to
relate to a specific earlier date, in which case such
representations and warranties shall be true and correct as of
such earlier date) and, in any event, except
57
as set forth on Schedule 9.5, since June 30, 2003, there has been
no material adverse change in the financial condition,
operations, assets, business, properties or prospects of the
Company and its Subsidiaries taken as a whole; and
(b) no Event of Default or Unmatured Event of Default shall
have then occurred and be continuing.
11.2.2 Confirmatory Certificate. If requested by the Agent or any
Bank, the Agent shall have received (in sufficient counterparts to
provide one to each Bank) a certificate dated the date of such
requested Loan or Letter of Credit and signed by a duly authorized
representative of the Company as to the matters set out in Section
11.2.1 (it being understood that each request by the Company for the
making of a Loan or the issuance of a Letter of Credit shall be deemed
to constitute a warranty by the Company that the conditions precedent
set forth in Section 11.2.1 will be satisfied at the time of the
making of such Loan or the issuance of such Letter of Credit),
together with such other documents as the Agent or any Bank may
reasonably request in support thereof.
SECTION 12. EVENTS OF DEFAULT AND THEIR EFFECT.
12.1 Events of Default. Each of the following shall constitute an Event of
Default under this Agreement:
12.1.1 Non-Payment of the Loans, etc. Default in the payment when
due of the principal of any Loan; or default, and continuance thereof
for five (5) days, in the payment when due of any interest, fee,
reimbursement obligation with respect to any Letter of Credit or other
amount payable by the Company hereunder or under any other Loan
Document.
12.1.2 Defaults Regarding Other Debt. Any default or event of
default shall occur under the terms applicable to: (a) the
Subordinated Debt or Pari Passu Debt; or (b) any other Debt of the
Company or any Subsidiary in an aggregate amount (for all such Debt so
affected) exceeding $100,000 and such default shall: (i) consist of
the failure to pay such Debt when due, whether by acceleration or
otherwise, or (ii) accelerate the maturity of such Debt or permit the
holder or holders thereof, or any trustee or agent for such holder or
holders, to cause such Debt to become due and payable (or require the
Company or any Subsidiary to purchase or redeem such Debt) prior to
its expressed maturity.
12.1.3 Other Material Obligations. Default in the payment when
due, or in the performance or observance of, any material obligation
of, or condition agreed to by, the Company or any Subsidiary with
respect to any of the Subordinated Debt, the Pari Passu Debt, the New
Equity Infusion Documents, the Turkey Vulture Settlement Documents or
any material purchase or lease of goods or services, in each such case
where such default, singly or in the aggregate with all other such
defaults, might reasonably be expected to have a Material Adverse
Effect.
58
12.1.4 Bankruptcy, Insolvency, etc. The Company or any Subsidiary
becomes insolvent or generally fails to pay, or admits in writing its
inability or refusal to pay, debts as they become due; or the Company
or any Subsidiary applies for, consents to, or acquiesces in the
appointment of a trustee, receiver or other custodian for the Company
or such Subsidiary or any property thereof, or makes a general
assignment for the benefit of creditors; or, in the absence of such
application, consent or acquiescence, a trustee, receiver or other
custodian is appointed for the Company or any Subsidiary or for a
substantial part of the property of any thereof and is not discharged
within 60 days; or any bankruptcy, reorganization, debt arrangement,
or other case or proceeding under any bankruptcy or insolvency law, or
any dissolution or liquidation proceeding, is commenced in respect of
the Company or any Subsidiary, and if such case or proceeding is not
commenced by the Company or such Subsidiary, it is consented to or
acquiesced in by the Company or such Subsidiary, or remains for 30
days undismissed; or the Company or any Subsidiary takes any action to
authorize, or in furtherance of, any of the foregoing.
12.1.5 Non-Compliance with Loan Documents.
(a) Failure by the Company to comply with or to perform any
covenant set forth in Section 10 of this Agreement; or
(b) failure by the Company to comply with or to perform any
other provision of this Agreement or any other Loan Document (and
not constituting an Event of Default under any other provision of
this Section 12) and continuance of such failure described in
this clause (b) for thirty (30) days.
12.1.6 Warranties. Any warranty made by the Company or any
Subsidiary herein or any other Loan Document is breached or is false
or misleading in any material respect, or any schedule, certificate,
financial statement, report, notice or other writing furnished by the
Company or any Subsidiary to the Agent or any Bank in connection
herewith is false or misleading in any material respect on the date as
of which the facts therein set forth are stated or certified.
12.1.7 Pension Plans. (i) Institution of any steps by the Company
or any other Person to terminate a Pension Plan if as a result of such
termination the Company could be required to make a contribution to
such Pension Plan, or could incur a liability or obligation to such
Pension Plan, in excess of $25,000; (ii) a contribution failure occurs
with respect to any Pension Plan sufficient to give rise to a Lien
under Section 302(f) of ERISA; or (iii) there shall occur any
withdrawal or partial withdrawal from a Multiemployer Pension Plan and
the withdrawal liability (without unaccrued interest) to Multiemployer
Pension Plans as a result of such withdrawal (including any
outstanding withdrawal liability that the Company and the Controlled
Group have incurred on the date of such withdrawal) exceeds $25,000.
12.1.8 Judgments. Final judgments which exceed an aggregate of
$50,000 shall be rendered against the Company or any Subsidiary and
shall not have been paid, discharged or vacated or had execution
thereof stayed pending appeal within thirty (30) days after entry or
filing of such judgments.
59
12.1.9 Invalidity of Guaranty, etc. The Guaranty shall cease to
be in full force and effect with respect to either of any Subsidiary;
or any Subsidiary (or any Person by, through or on behalf of such
Subsidiary) shall contest in any manner the validity, binding nature
or enforceability of the Guaranty with respect to such Subsidiary.
12.1.10 Invalidity of Collateral Documents, etc. (a) Any
Collateral Document shall cease to be in full force and effect; or the
Company or any Subsidiary (or any Person by, through or on behalf of
the Company or any Subsidiary) shall contest in any manner the
validity, binding nature or enforceability of any Collateral Document;
(b) the entry of any judgment, decree, levy, attachment, garnishment
or other process, or the filing of any Lien against, any of the
Collateral or any collateral under a separate security agreement
securing any of the Obligations; or (c) the loss, theft, destruction,
seizure or forfeiture, or the occurrence of any material deterioration
or impairment of any of the Collateral which Agent, in its sole
discretion, deems material, or any of the collateral under any
security agreement securing any of the Obligations; or (d) any
material decline or depreciation in the value or market price thereof
(whether actual or reasonably anticipated), which causes the
Collateral, in the sole opinion of the Agent acting in good faith, to
become unsatisfactory as to value or character, or which causes the
Agent to reasonably believe that it is insecure and that the
likelihood for repayment of the Obligations is or will soon be
impaired, time being of the essence (the cause of such deterioration,
impairment, decline or depreciation shall include, but is not limited
to, the failure by the Company to do any act deemed necessary by the
Agent to preserve and maintain the value and collectability of the
Collateral).
12.1.11 Invalidity of Subordination Provisions, etc. Any
subordination provision in any document or instrument governing
Subordinated Debt, or any subordination provision in any guaranty by
any Subsidiary of any Subordinated Debt, shall cease to be in full
force and effect, or the Company or any other Person (including the
holder of any applicable Subordinated Debt) shall contest in any
manner the validity, binding nature or enforceability of any such
provision.
12.1.12 Change of Control.
(a) Any Person or group of Persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934 shall
acquire beneficial ownership (within the meaning of Rule 13d-3
promulgated under such Act) of more than fifteen percent (15%) of
the outstanding securities (on a fully diluted basis and taking
into account any securities or contract rights exercisable,
exchangeable or convertible into equity securities) of the
Company having voting rights in the election of directors under
normal circumstances; or
(b) A majority of the members of the Board of Directors of
the Company shall cease to be Continuing Members.
For purposes of the foregoing, "Continuing Member" means a member
of the Board of Directors of the Company who either: (i) was a
member of the Company's Board of Directors on the day before the
Restatement Effective Date and has been such continuously
thereafter or (ii) became a member of such Board of Directors
after the day before the
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Restatement Effective Date and whose election or nomination for
election was approved by a vote of the majority of the Continuing
Members then members of the Company's Board of Directors.
12.1.13 Management. A period of ninety (90) consecutive days
shall have elapsed during which ▇▇▇▇ ▇. ▇▇▇▇▇, Esq. is a not senior
officer of the Company actively involved with the management of the
Company and its Subsidiaries, for any reason, unless prior to the
expiration of such period, a replacement officer in respect of such
Person satisfactory to the Agent in its sole discretion shall have
been appointed and employed by the Company.
12.1.14 Material Adverse Effect. The occurrence of any event
having a Material Adverse Effect.
12.1.15 Insecurity. The Agent or the Required Banks in good faith
believe that the Banks are insecure or under-collateralized.
12.1.16 Non Monetary Judgments. Any non monetary judgment, order
or decree shall be rendered against any Loan Party which does or could
reasonably be expected to have a Material Adverse Effect, and there
shall be any period of thirty (30) consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect.
12.2 Effect of Event of Default. If any Event of Default described in
Section 12.1.4 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and the Loans and all other obligations
hereunder shall become immediately due and payable and the Company shall become
immediately obligated to Cash Collateralize all Letters of Credit, all without
presentment, demand, protest or notice of any kind; and, if any other Event of
Default shall occur and be continuing, the Agent (upon written request of the
Required Banks) shall declare the Commitments (if they have not theretofore
terminated) to be terminated and/or declare all Loans and all other obligations
hereunder to be due and payable and/or demand that the Company immediately Cash
Collateralize all Letters of Credit, whereupon the Commitments (if they have not
theretofore terminated) shall immediately terminate and/or all Loans and all
other obligations hereunder shall become immediately due and payable and/or the
Company shall immediately become obligated to Cash Collateralize all Letters of
Credit, all without presentment, demand, protest or notice of any kind. The
Agent shall promptly advise the Company of any such declaration, but failure to
do so shall not impair the effect of such declaration. Notwithstanding the
foregoing, the effect as an Event of Default of any event described in Section
12.1.1 or Section 12.1.4 may be waived by the written concurrence of all of the
Banks, and the effect as an Event of Default of any other event described in
this Section 12 may be waived by the written concurrence of the Required Banks.
Any cash collateral delivered hereunder shall be held by the Agent (without
liability for interest thereon) and applied to Obligations arising in connection
with any drawing under a Letter of Credit. After the expiration or termination
of all Letters of Credit, such cash collateral shall be applied by the Agent to
any remaining obligations hereunder and any excess shall be delivered to the
Company or as a court of competent jurisdiction may elect.
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12.3 Additional Remedies. Without limiting Section 12.2 or anything in any
Collateral Document (but in addition thereto):
12.3.1 Possession and Assembly of Collateral. After the
occurrence and during the continuance of any Event of Default, the
Agent may, without notice, demand or legal process of any kind, take
possession of any or all of the Collateral (in addition to Collateral
of which the Agent already has possession), wherever it may be found,
and for that purpose may pursue the same wherever it may be found, and
may enter into any Loan Party's premises where any of the Collateral
may be or is supposed to be, and search for, take possession of,
remove, keep and store any of the Collateral until the same shall be
sold or otherwise disposed of and the Agent shall have the right to
store the same in any Loan Party's premises without cost to the Agent.
At the Agent's request, the Company will, at the Company's sole
expense, assemble the Collateral and make it available to the Agent at
a place or places to be designated by the Agent which is reasonably
convenient to the Agent and the Company.
12.3.2 Sale of Collateral. After the occurrence and during the
continuance of any Event of Default, the Agent may sell any or all of
the Collateral at public or private sale, upon such terms and
conditions as the Agent may deem proper, and the Agent may purchase
any or all of the Collateral at any such sale. The Agent may apply the
net proceeds, after deducting all costs, expenses, attorneys' and
paralegals' fees incurred or paid at any time in the collection,
protection and sale of the Collateral and the Obligations, to the
payment of the Notes and/or any of the other Obligations, returning
the excess proceeds, if any, to the Company. The Company shall remain
liable for any amount remaining unpaid after such application, with
interest. Any notification of intended disposition of the Collateral
required by law shall be conclusively deemed reasonably and properly
given if given by the Agent at least ten (10) calendar days before the
date of such disposition. The Company hereby confirms, approves and
ratifies all acts and deeds of the Agent relating to the foregoing,
and each part thereof.
12.3.3 Standards for Exercising Remedies. To the extent that
applicable law imposes duties on the Agent to exercise remedies in a
commercially reasonable manner, the Company acknowledges and agrees
that it is not commercially unreasonable for the Agent (a) to fail to
incur expenses reasonably deemed significant by the Agent to prepare
Collateral for disposition or otherwise to complete raw material or
work-in-process into finished goods or other finished products for
disposition, (b) to fail to obtain third party consents for access to
Collateral to be disposed of, or to obtain or, if not required by
other law, to fail to obtain governmental or third party consents for
the collection or disposition of Collateral to be collected or
disposed of, (c) to fail to exercise collection remedies against
Account Debtors or other Persons obligated on Collateral or to remove
Liens or encumbrances on or any adverse claims against Collateral, (d)
to exercise collection remedies against Account Debtors and other
Persons obligated on Collateral directly or through the use of
collection agencies and other collection specialists, (e) to advertise
dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature,
(f) to contact other Persons, whether or not in the same business as
the Company, for expressions of interest in acquiring all or any
62
portion of the Collateral, (g) to hire one or more professional
auctioneers to assist in the disposition of Collateral, whether or not
the Collateral is of a specialized nature, (h) to dispose of
Collateral by utilizing Internet sites that provide for the auction of
assets of the types included in the Collateral or that have the
reasonable capability of doing so, or that match buyers and sellers of
assets, (i) to dispose of assets in wholesale rather than retail
markets, (j) to disclaim disposition warranties, including, without
limitation, any warranties of title, (k) to purchase insurance or
credit enhancements to insure the Agent against risks of loss,
collection or disposition of Collateral or to provide to the Agent a
guaranteed return from the collection or disposition of Collateral, or
(l) to the extent deemed appropriate by the Agent, to obtain the
services of other brokers, investment bankers, consultants and other
professionals to assist the Agent in the collection or disposition of
any of the Collateral. The Company acknowledges that the purpose of
this Section is to provide non-exhaustive indications of what actions
or omissions by the Agent would not be commercially unreasonable in
the Agent's exercise of remedies against the Collateral and that other
actions or omissions by the Agent shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section.
Without limitation upon the foregoing, nothing contained in this
Section shall be construed to grant any rights to the Company or to
impose any duties on the Agent that would not have been granted or
imposed by this Agreement or by applicable law in the absence of this
Section.
12.3.4 UCC and Offset Rights. The Agent may exercise, from time
to time, any and all rights and remedies available to it under the UCC
or under any other applicable law in addition to, and not in lieu of,
any rights and remedies expressly granted in this Agreement or any
other Loan Document, and may, without demand or notice of any kind,
appropriate and apply toward the payment of such of the Obligations,
whether matured or unmatured, including costs of collection and
attorneys' and paralegals' fees, and in such order of application as
the Agent may, from time to time, elect, any indebtedness of the Agent
to any Loan Party, however created or arising, including, but not
limited to, balances, credits, deposits, accounts or moneys of such
Loan Party in the possession, control or custody of, or in transit to
the Agent. The Company, on behalf of itself and each other Loan Party,
hereby waives the benefit of any law that would otherwise restrict or
limit the Agent in the exercise of its right, which is hereby
acknowledged, to appropriate at any time hereafter any such
indebtedness owing from the Agent to any Loan Party.
12.4 Additional Remedies. The Agent shall have the right and power to any
of the following after the occurrence and during the continuance of any Event of
Default:
(a) instruct the Company, at its own expense, to notify any
parties obligated on any of the Collateral, including, but not
limited to, any Account Debtors, to make payment directly to the
Agent of any amounts due or to become due thereunder, or the
Agent may directly notify such obligors of the security interest
of the Agent, and/or of the assignment to the Agent of the
Collateral and direct such obligors to make payment to the Agent
of any amounts due or to become due with
63
respect thereto, and thereafter, collect any such amounts due on
the Collateral directly from such Persons obligated thereon;
(b) enforce collection of any of the Collateral, including,
but not limited to, any Accounts, by suit or otherwise, or make
any compromise or settlement with respect to any of the
Collateral, or surrender, release or exchange all or any part
thereof, or compromise, extend or renew for any period (whether
or not longer than the original period) any indebtedness
thereunder;
(c) take possession or control of any proceeds and products
of any of the Collateral, including the proceeds of insurance
thereon;
(d) extend, renew or modify for one or more periods (whether
or not longer than the original period) the Notes, any other of
the Obligations, any obligation of any nature of any other
obligor with respect to the Notes or any of the Obligations;
(e) grant releases, compromises or indulgences with respect
to the Notes, any of the Obligations, any extension or renewal of
any of the Obligations, any security therefor, or to any other
obligor with respect to the Notes or any of the Obligations;
(f) transfer the whole or any part of securities which may
constitute Collateral into the name of the Agent or the Agent's
nominee without disclosing, if the Agent so desires, that such
securities so transferred are subject to the security interest of
the Agent, and any corporation, association, or any of the
managers or trustees of any trust issuing any of said securities,
or any transfer agent, shall not be bound to inquire, in the
event that the Agent or said nominee makes any further transfer
of said securities, or any portion thereof, as to whether the
Agent or such nominee has the right to make such further
transfer, and shall not be liable for transferring the same;
(g) vote the Collateral;
(h) make an election with respect to the Collateral under
Section 1111 of the Bankruptcy Code or take action under Section
364 or any other section of the Bankruptcy Code; provided,
however, that any such action of the Agent as set forth herein
shall not, in any manner whatsoever, impair or affect the
liability of the Company under the Loan Documents, nor prejudice,
waive, nor be construed to impair, affect, prejudice or waive the
Agent's rights and remedies at law, in equity or by statute, nor
release, discharge, nor be construed to release or discharge, the
Company, any guarantor or other Loan Party or Person liable to
the Agent or any other Bank Party for the Obligations;
(i) at any time, and from time to time, accept additions to,
releases, reductions, exchanges or substitution of the
Collateral, without in any way altering, impairing, diminishing
or affecting the provisions of this Agreement, the other Loan
64
Documents, or any of the other Obligations, or the Bank Parties'
rights hereunder, under the Notes or under any of the other
Obligations;
(j) surrender any and all Life Insurance Policies (or
otherwise liquidate the same) and receive the cash surrender
value of any and all Life Insurance Policies and apply the cash
proceeds thereof to the Obligations.
The Company hereby ratifies and confirms whatever the Bank Parties may do
with respect to the Collateral and agrees that the Agent or any other Bank Party
shall not be liable for any error of judgment or mistakes of fact or law with
respect to actions taken in connection with the Collateral.
12.5 Attorney-in-Fact. The Company hereby irrevocably makes, constitutes
and appoints the Agent (and any officer of the Agent or any Person designated by
the Agent for that purpose) as the Company's true and lawful proxy and
attorney-in-fact (and agent-in-fact) in the Company's name, place and stead,
with full power of substitution, to (i) take such actions as are permitted in
this Agreement and the other Loan Documents, (ii) execute such financing
statements and other documents and to do such other acts as the Agent may
require to perfect and preserve the Agent's security interest in, and to enforce
such interests in the Collateral, and (iii) carry out any remedy provided for in
this Agreement, including, without limitation, endorsing the Company's name to
checks, drafts, instruments and other items of payment, and proceeds of the
Collateral, executing change of address forms with the postmaster of the United
States Post Office serving the address of the Company, changing the address of
the Company to that of the Agent, opening all envelopes addressed to the Company
and applying any payments contained therein to the Obligations. The Company
hereby acknowledges that the constitution and appointment of such proxy and
attorney-in-fact are coupled with an interest and are irrevocable. The Company
hereby ratifies and confirms all that said attorney-in-fact may do or cause to
be done by virtue of any provision of this Agreement.
12.6 No Marshaling. Neither the Agent nor any other Bank Party shall be
required to marshal any present or future collateral security (including but not
limited to the Collateral Documents and the Collateral) for, or other assurances
of payment of, the Obligations or any of them or to resort to such collateral
security or other assurances of payment in any particular order. To the extent
that it lawfully may, the Company hereby agrees that it will not invoke any law
relating to the marshaling of Collateral which might cause delay in or impede
the enforcement of the Agent's rights under this Agreement or under any other
Loan Document, and, to the extent that it lawfully may, the Company hereby
irrevocably waives the benefits of all such laws.
SECTION 13. THE AGENT.
13.1 Appointment and Authorization.
(a) Each Bank hereby irrevocably (subject to Section 13.9)
appoints, designates and authorizes the Agent to take such action
on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such
duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers
as are reasonably incidental thereto. Notwithstanding any
provision to the contrary
65
contained elsewhere in this Agreement or in any other Loan
Document, the Agent shall not have any duty or responsibility
except those expressly set forth herein, nor shall the Agent have
or be deemed to have any fiduciary relationship with any Bank,
and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or
any other Loan Document or otherwise exist against the Agent.
(b) The Issuing Bank shall act on behalf of the Banks with
respect to any Letters of Credit issued by it and the documents
associated therewith. The Issuing Bank shall have all of the
benefits and immunities: (i) provided to the Agent in this
Section 13 with respect to any acts taken or omissions suffered
by the Issuing Bank in connection with Letters of Credit issued
by it or proposed to be issued by it and the applications and
agreements for letters of credit pertaining to such Letters of
Credit as fully as if the term "Agent", as used in this Section
13, included the Issuing Bank with respect to such acts or
omissions and (ii) as additionally provided in this Agreement
with respect to the Issuing Bank.
13.2 Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
13.3 Liability of Agent. None of the Agent nor any of its directors,
officers, employees or agents shall: (i) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement or
any other Loan Document or the transactions contemplated hereby (except for its
own gross negligence or willful misconduct), or (ii) be responsible in any
manner to any of the Banks for any recital, statement, representation or
warranty made by the Company or any Subsidiary or Affiliate of the Company, or
any officer thereof, contained in this Agreement or in any other Loan Document,
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Company or any other party to any Loan
Document to perform its obligations hereunder or thereunder. The Agent shall not
be under any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of the Company or any of the Company's Subsidiaries or
Affiliates.
13.4 Reliance by Agent. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan
66
Document unless it shall first receive such advice or concurrence of the
Required Banks as it deems appropriate and, if it so requests, confirmation from
the Banks of their obligation to indemnify the Agent against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Required
Banks and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks.
13.5 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Event of Default or Unmatured Event of Default
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Agent for the account of the Banks, unless the Agent
shall have received written notice from a Bank or the Company referring to this
Agreement, describing such Event of Default or Unmatured Event of Default and
stating that such notice is a "notice of default." The Agent will notify the
Banks of its receipt of any such notice. The Agent shall take such action with
respect to such Event of Default or Unmatured Event of Default as may be
requested by the Required Banks in accordance with Section 12; provided, unless
and until the Agent has received any such request, the Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Event of Default or Unmatured Event of Default as it shall deem
advisable or in the best interest of the Banks.
13.6 Credit Decision. Each Bank acknowledges that the Agent has not made
any representation or warranty to it, and that no act by the Agent hereafter
taken, including any review of the affairs of the Company and its Subsidiaries,
shall be deemed to constitute any representation or warranty by the Agent to any
Bank. Each Bank represents to the Agent that it has, independently and without
reliance upon the Agent and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company and its Subsidiaries, and made its own decision
to enter into this Agreement and to extend credit to the Company hereunder. Each
Bank also represents that it will, independently and without reliance upon the
Agent and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Company. Except for notices, reports and
other documents expressly herein required to be furnished to the Banks by the
Agent, the Agent shall not have any duty or responsibility to provide any Bank
with any credit or other information concerning the business, prospects,
operations, property, financial or other condition or creditworthiness of the
Company which may come into the possession of the Agent.
13.7 Indemnification. Whether or not the transactions contemplated hereby
are consummated, the Banks shall indemnify upon demand the Agent and its
directors, officers, employees and agents (to the extent not reimbursed by or on
behalf of the Company and without limiting the obligation of the Company to do
so), pro rata, from and against any and all Indemnified Liabilities; provided,
no Bank shall be liable for any payment to any such Person of any portion of the
Indemnified Liabilities resulting from such Person's gross negligence or willful
67
misconduct. Without limitation of the foregoing, each Bank shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Company. The undertaking in this Section shall survive repayment of the
Loans, cancellation of the Notes, expiration or termination of the Letters of
Credit, any foreclosure under, or modification, release or discharge of, any or
all of the Collateral Documents, termination of this Agreement and the
resignation or replacement of the Agent.
13.8 Agent in Individual Capacity. LaSalle and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though LaSalle were not the Agent or the Issuing
Bank hereunder and without notice to or consent of the Banks. The Banks
acknowledge that, pursuant to such activities, LaSalle or its Affiliates may
receive information regarding the Company or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Company or such Affiliate) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to their Loans (if
any), LaSalle and its Affiliates shall have the same rights and powers under
this Agreement as any other Bank and may exercise the same as though LaSalle
were not the Agent and the Issuing Bank, and the terms "Bank" and "Banks"
include LaSalle and its Affiliates, to the extent applicable, in their
individual capacities.
13.9 Successor Agent. The Agent may resign as Agent upon thirty (30) days
notice to the Banks. If the Agent resigns under this Agreement, the Required
Banks shall, with (so long as no Event of Default exists) the consent of the
Company (which shall not be unreasonably withheld or delayed), appoint from
among the Banks a successor agent for the Banks. If no successor agent is
appointed prior to the effective date of the resignation of the Agent, the Agent
may appoint, after consulting with the Banks and the Company, a successor agent
from among the Banks. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
agent, and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 13 and Sections 14.6 and 14.13 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent by
the date which is thirty (30) days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Banks shall perform all of the duties of the Agent
hereunder until such time, if any, as the Required Banks appoint a successor
agent as provided for above.
13.10 Collateral Matters. The Banks irrevocably authorize the Agent, at its
option and in its discretion: (a) to release any Lien granted to or held by the
Agent under any Collateral
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Document (i) upon termination of the Commitments and payment in full of all
Loans and all other obligations of the Company hereunder and the expiration or
termination of all Letters of Credit; (ii) constituting property sold or to be
sold or disposed of as part of or in connection with any disposition permitted
hereunder; or (iii) subject to Section 14.1, if approved, authorized or ratified
in writing by the Required Banks; or (b) to subordinate its interest in any
Collateral to any holder of a Lien on such Collateral which is permitted by
clause (d)(i) or (d)(iii) of Section 10.8 (it being understood that the Agent
may conclusively rely on a certificate from the Company in determining whether
the Debt secured by any such Lien is permitted by Section 10.7(b)). Upon request
by the Agent at any time, the Banks will confirm in writing the Agent's
authority to release, or subordinate its interest in, particular types or items
of Collateral pursuant to this Section 13.10.
13.11 Funding Reliance.
(a) Unless the Agent receives notice from a Bank by noon,
Chicago time, on the day of a proposed borrowing that such Bank
will not make available to the Agent an amount equal to its Pro
Rata Share of such borrowing, the Agent may assume that such Bank
has made such amount available to the Agent and, in reliance upon
such assumption, make a corresponding amount available to the
Company. If and to the extent such Bank has not made such amount
available to the Agent, such Bank and the Company jointly and
severally agree to repay such amount to the Agent forthwith on
demand, together with interest thereon at the interest rate
applicable to Loans comprising such borrowing or, in the case of
any Bank which repays such amount within three Business Days, the
Federal Funds Rate (together with such other compensatory amounts
as may be required to be paid by such Bank to the Agent pursuant
to the Rules for Interbank Compensation of the Council on
International Banking or the Clearinghouse Compensation
Committee, as applicable, as in effect from time to time).
Nothing set forth in this clause (a) shall relieve any Bank of
any obligation it may have to make any Loan hereunder.
(b) Unless the Agent receives notice from the Company prior
to the due date for any payment hereunder that the Company does
not intend to make such payment, the Agent may assume that the
Company has made such payment and, in reliance upon such
assumption, make available to each Bank its share of such
payment. If and to the extent that the Company has not made any
such payment to the Agent, each Bank which received a share of
such payment shall repay such share (or the relevant portion
thereof) to the Agent forthwith on demand, together with interest
thereon at the Base Rate (or, in the case of any Bank which
repays such amount within three Business Days, the Federal Funds
Rate). Nothing set forth in this clause (b) shall relieve the
Company of any obligation it may have to make any payment
hereunder.
SECTION 14. GENERAL.
14.1 Waiver; Amendments. No delay on the part of the Agent or any Bank in
the exercise of any right, power or remedy shall operate as a waiver thereof,
nor shall any single or
69
partial exercise by any of them of any right, power or remedy preclude other or
further exercise thereof, or the exercise of any other right, power or remedy.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Agreement or the Notes shall in any event be effective unless
the same shall be in writing and signed and delivered by Banks having an
aggregate Pro Rata Share of not less than the aggregate Pro Rata Share expressly
designated herein with respect thereto or, in the absence of such designation as
to any provision of this Agreement or the Notes, by the Required Banks, and then
any such amendment, modification, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No
amendment, modification, waiver or consent shall change the Pro Rata Share of
any Bank without the consent of such Bank. No amendment, modification, waiver or
consent shall: (i) increase the Revolving Commitment Amount, (ii) extend the
date for payment of any principal of or interest on the Loans or any fees
payable hereunder, (iii) reduce the principal amount of any Loan, the rate of
interest thereon or any fees payable hereunder, (iv) release the Guaranty or all
or any substantial part of the collateral granted under the Collateral Documents
or (v) reduce the aggregate Pro Rata Share required to effect an amendment,
modification, waiver or consent without, in each case, the consent of all Banks.
No provision of Section 13 or other provision of this Agreement affecting the
Agent in its capacity as such shall be amended, modified or waived without the
consent of the Agent. No provision of this Agreement relating to the rights or
duties of the Issuing Bank in its capacity as such shall be amended, modified or
waived without the consent of the Issuing Bank.
14.2 Confirmations. The Company and each holder of a Note agree from time
to time, upon written request received by it from the other, to confirm to the
other in writing (with a copy of each such confirmation to the Agent) the
aggregate unpaid principal amount of the Loans then outstanding under such Note.
14.3 Notices. Except as otherwise provided in Sections 2.2.2 and 2.2.3, all
notices hereunder shall be in writing (including facsimile transmission) and
shall be sent to the applicable party at its address shown on Schedule 14.3 or
at such other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when sent; notices
sent by mail shall be deemed to have been given three Business Days after the
date when sent by registered or certified mail, postage prepaid; and notices
sent by hand delivery or overnight courier service shall be deemed to have been
given when received. For purposes of Sections 2.2.2 and 2.2.3, the Agent shall
be entitled to rely on telephonic instructions from any person that the Agent in
good faith believes is an authorized officer or employee of the Company, and the
Company shall hold the Agent and each other Bank harmless from any loss, cost or
expense resulting from any such reliance.
14.4 Computations. Where the character or amount of any asset or liability
or item of income or expense is required to be determined, or any consolidation
or other accounting computation is required to be made, for the purpose of this
Agreement, such determination or calculation shall, to the extent applicable and
except as otherwise specified in this Agreement, be made in accordance with
GAAP, consistently applied; provided, if the Company notifies the Agent that the
Company wishes to amend any covenant in Section 10 to eliminate or to take into
account the effect of any change in GAAP on the operation of such covenant (or
if the Agent
70
notifies the Company that the Required Banks wish to amend Section 10 for such
purpose), then the Company's compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Company and the Required Banks.
14.5 Regulation U. Each Bank represents that it in good faith is not
relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.
14.6 Costs, Expenses and Taxes. The Company agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Agent (including Attorney
Costs) in connection with the preparation, execution, syndication, delivery and
administration of this Agreement, the other Loan Documents and all other
documents provided for herein or delivered or to be delivered hereunder or in
connection herewith (including any amendment, supplement or waiver to any Loan
Document), and all reasonable out-of-pocket costs and expenses (including
Attorney Costs) incurred by the Agent and each Bank after an Event of Default in
connection with the enforcement of this Agreement, the other Loan Documents or
any such other documents. In addition, the Company agrees to pay, and to save
the Agent and the Banks harmless from all liability for: (a) any stamp or other
taxes (excluding income taxes and franchise taxes based on net income) which may
be payable in connection with the execution and delivery of this Agreement, the
borrowings hereunder, the issuance of the Notes or the execution and delivery of
any other Loan Document or any other document provided for herein or delivered
or to be delivered hereunder or in connection herewith and (b) any fees of the
Company's auditors in connection with any reasonable exercise by the Agent and
the Banks of their rights pursuant to Section 10.2. All obligations provided for
in this Section 14.6 shall survive repayment of the Loans, cancellation of the
Notes, expiration or termination of the Letters of Credit and termination of
this Agreement.
14.7 Subsidiary References. The provisions of this Agreement relating to
Subsidiaries shall apply only during such times as the Company has one or more
Subsidiaries.
14.8 Captions. Section captions used in this Agreement are for convenience
only and shall not affect the construction of this Agreement.
14.9 Assignments; Participations.
14.9.1 Assignments. Any Bank may, with the prior written consents of
the Issuing Bank and the Agent and (so long as no Event of Default exists)
the Company (which consents shall not be unreasonably delayed or withheld
and, in any event, shall not be required for an assignment by a Bank to one
of its Affiliates or another Bank or by LaSalle to an Approved Fund), at
any time assign and delegate to one or more commercial banks or other
Persons (any Person to whom such an assignment and delegation is to be made
being herein called an "Assignee") all or any fraction of such Bank's Loans
and Commitment (which assignment and delegation shall be of a constant, and
not a varying, percentage of all the assigning Bank's Loans and Commitment)
in a minimum aggregate amount equal to the lesser of: (i) the amount of the
assigning Bank's Pro Rata Share of the Revolving Commitment Amount and the
Term Loans and (ii) $3,000,000 (except in
71
connection with an assignment to an Affiliate or another Bank or by LaSalle
to an Approved Fund, to which no minimum amount shall apply); provided: (a)
no assignment and delegation may be made to any Person if, at the time of
such assignment and delegation, the Company would be obligated to pay any
greater amount under Section 7.6 or Section 8 to the Assignee than the
Company is then obligated to pay to the assigning Bank under such Sections
(and if any assignment is made in violation of the foregoing, the Company
will not be required to pay the incremental amounts) and (b) the Company
and the Agent shall be entitled to continue to deal solely and directly
with such Bank in connection with the interests so assigned and delegated
to an Assignee until the date when all of the following conditions shall
have been met:
(x) five (5) Business Days (or such lesser period of time as the Agent
and the assigning Bank shall agree) shall have passed after written notice
of such assignment and delegation, together with payment instructions,
addresses and related information with respect to such Assignee, shall have
been given to the Company and the Agent by such assigning Bank and the
Assignee,
(y) the assigning Bank and the Assignee shall have executed and
delivered to the Company and the Agent an assignment agreement
substantially in the form of Exhibit D (an "Assignment Agreement"),
together with any documents required to be delivered thereunder, which
Assignment Agreement shall have been accepted by the Agent, and
(z) except in the case of an assignment by a Bank to one of its
Affiliates, the assigning Bank or the Assignee shall have paid the Agent a
processing fee of $3,500.
From and after the date on which the conditions described above have been met:
(x) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Bank hereunder and (y) the assigning Bank, to the
extent that rights and obligations hereunder have been assigned and delegated by
it pursuant to such Assignment Agreement, shall be released from its obligations
hereunder. Within five Business Days after effectiveness of any assignment and
delegation, the Company shall execute and deliver to the Agent (for delivery to
the Assignee and the Assignor, as applicable) a new Note in the principal amount
of the Assignee's Pro Rata Share of the Revolving Commitment Amount and the Term
Loans and, if the assigning Bank has retained a Commitment hereunder, a
replacement Note in the principal amount of the Pro Rata Share of the Revolving
Commitment Amount and the Term Loans retained by the assigning Bank retained by
the assigning Bank (such Note to be in exchange for, but not in payment of, the
predecessor Note held by such assigning Bank). Each such Note shall be dated the
effective date of such assignment. The assigning Bank shall ▇▇▇▇ the predecessor
Note "exchanged" and deliver it to the Company. Accrued interest on that part of
the predecessor Note being assigned shall be paid as provided in the Assignment
Agreement. Accrued interest and fees on that part of the predecessor Note not
being assigned shall be paid to the assigning Bank. Accrued interest and accrued
fees shall be paid at the same time or times provided in the predecessor Note
and in this Agreement. Any attempted assignment and delegation not made in
accordance with this Section 14.9.1 shall be null and void.
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Notwithstanding the foregoing provisions of this Section 14.9.1 or any
other provision of this Agreement, any Bank may at any time assign all or any
portion of its Loans and its Note to a Federal Reserve Bank (but no such
assignment shall release any Bank from any of its obligations hereunder).
14.9.2 Participations. Any Bank may at any time sell to one or more
commercial banks or other Persons participating interests in any Loan owing
to such Bank, the Note held by such Bank, the Commitment of such Bank, the
direct or participation interest of such Bank in any Letter of Credit or
any other interest of such Bank hereunder (any Person purchasing any such
participating interest being herein called a "Participant"). In the event
of a sale by a Bank of a participating interest to a Participant: (x) such
Bank shall remain the holder of its Note for all purposes of this
Agreement, (y) the Company and the Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations hereunder and (z) all amounts payable by the Company shall be
determined as if such Bank had not sold such participation and shall be
paid directly to such Bank. No Participant shall have any direct or
indirect voting rights hereunder except with respect to any of the events
described in the fourth sentence of Section 14.1. Each Bank agrees to
incorporate the requirements of the preceding sentence into each
participation agreement which such Bank enters into with any Participant.
The Company agrees that if amounts outstanding under this Agreement and the
Notes are due and payable (as a result of acceleration or otherwise), each
Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement, any Note and
with respect to any Letter of Credit to the same extent as if the amount of
its participating interest were owing directly to it as a Bank under this
Agreement or such Note; provided, such right of setoff shall be subject to
the obligation of each Participant to share with the Banks, and the Banks
agree to share with each Participant, as provided in Section 7.5. The
Company also agrees that each Participant shall be entitled to the benefits
of Section 7.6 and Section 8 as if it were a Bank (provided that no
Participant shall receive any greater compensation pursuant to Section 7.6
or Section 8 than would have been paid to the participating Bank if no
participation had been sold).
14.10 Governing Law. This Agreement and each Note shall be a contract made
under and governed by the internal laws of the State of Illinois applicable to
contracts made and to be performed entirely within such State. Whenever possible
each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Company and rights of the Agent and the Banks
expressed herein or in any other Loan Document shall be in addition to and not
in limitation of those provided by applicable law.
14.11 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be
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deemed to be an original, but all such counterparts shall together constitute
but one and the same Agreement.
14.12 Successors and Assigns. This Agreement shall be binding upon the
Company, the Banks and the Agent and their respective successors and assigns,
and shall inure to the benefit of the Company, the Banks and the Agent and the
successors and assigns of the Banks and the Agent.
14.13 Indemnification by the Company. In consideration of the execution and
delivery of this Agreement by the Agent and the Banks and the agreement to
extend the Commitments provided hereunder, the Company hereby agrees to
indemnify, exonerate and hold the Agent, each Bank and each of the officers,
directors, employees, Affiliates and agents of the Agent and each Bank (each a
"Bank Party") free and harmless from and against any and all actions, causes of
action, suits, losses, liabilities, damages and expenses, including Attorney
Costs (collectively, the "Indemnified Liabilities"), incurred by the Bank
Parties or any of them as a result of, or arising out of, or relating to: (i)
any tender offer, merger, purchase of stock, purchase of assets or other similar
transaction financed or proposed to be financed in whole or in part, directly or
indirectly, with the proceeds of any of the Loans, (ii) the use, handling,
release, emission, discharge, transportation, storage, treatment or disposal of
any hazardous substance at any property owned or leased by the Company or any
Subsidiary, (iii) any violation of any Environmental Laws with respect to
conditions at any property owned or leased by the Company or any Subsidiary or
the operations conducted thereon, (iv) the investigation, cleanup or remediation
of offsite locations at which the Company or any Subsidiary or their respective
predecessors are alleged to have directly or indirectly disposed of hazardous
substances or (v) the execution, delivery, performance or enforcement of this
Agreement or any other Loan Document by any of the Bank Parties, except for any
such Indemnified Liabilities arising on account of the applicable Bank Party's
gross negligence or willful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. All
obligations provided for in this Section 14.13 shall survive repayment of the
Loans, cancellation of the Notes, expiration or termination of the Letters of
Credit, any foreclosure under, or any modification, release or discharge of, any
or all of the Collateral Documents and termination of this Agreement.
14.14 Nonliability of Banks. The relationship between the Company on the
one hand and the Banks and the Agent on the other hand shall be solely that of
borrower and lender. Neither the Agent nor any Bank shall have any fiduciary
responsibility to the Company. Neither the Agent nor any Bank undertakes any
responsibility to the Company to review or inform the Company or any matter in
connection with any phase of the Company's business or operations. The Company
agrees that neither the Agent nor any Bank shall have liability to the Company
(whether sounding in tort, contract or otherwise) for losses suffered by the
Company in connection with, arising out of, or in any way related to the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the Agent
nor any Bank shall have any liability with respect to, and the Company hereby
waives, releases and agrees not to ▇▇▇ for, any special,
74
indirect or consequential damages suffered by the Company in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
14.15 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS; PROVIDED, ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT
THE STATE OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
14.16 Waiver of Jury Trial. EACH OF THE COMPANY, THE AGENT AND EACH BANK
HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
14.17 No Novation. Notwithstanding anything to the contrary contained
herein, this Agreement is not intended to and does not serve to effect a
novation of the Obligations under the Original Credit Agreement. Instead, it is
the express intention of the parties hereto to reaffirm the indebtedness created
under the Original Credit Agreement which is evidenced by the notes provided for
therein and secured by the Collateral. The Company acknowledges and confirms
that the liens and security interests granted pursuant to the Loan Documents
secure the indebtedness, liabilities and obligations of the Company to Agent and
the Banks under the Original Credit Agreement, as amended and restated hereby,
and that the term "Obligations" as used in the Loan Documents (or any other term
used therein to describe or refer to the indebtedness, liabilities and
obligations of the Company to Agent and the Banks) includes, without limitation,
the indebtedness, liabilities and obligations of the Company under the Notes to
be delivered hereunder, and under the "Credit Agreement," as amended and
restated hereby, as the same may
75
be further amended, modified, supplemented or restated from time to time. The
Loan Documents and all agreements, instruments and documents executed or
delivered in connection with any of the foregoing shall each be deemed to be
amended to the extent necessary to give effect to the provisions of this
Agreement. Cross-references in the Loan Documents to particular section numbers
in the Original Credit Agreement shall be deemed to be cross-references to the
corresponding sections, as applicable, of this Agreement.
- Remainder of Page Intentionally Left Blank -
[Signature Page Follows]
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Delivered at Chicago, Illinois, as of the day and year first above written.
AGENT AND BANK:
LASALLE BANK, NATIONAL ASSOCIATION,
a national banking association, as Agent and as a
Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
COMPANY:
ENERGY WEST, INCORPORATED, a Montana
corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Title: Vice President and Treasurer
-----------------------------------------
Amended and Restated Credit Agreement
60248618.2
EXHIBIT A to Credit Agreement
FORM OF NOTE
[AMENDED AND SUBSTITUTE] NOTE
___________ ___, 20__
$___________________ Chicago, Illinois
[Original Note dated ______________ __, 20__]
The undersigned, ENERGY WEST, INCORPORATED, a Montana corporation (the
"Company"), for value received, promises to pay to the order of
_________________________________, a ___________ ______________ (the "Bank") at
the principal office of LaSalle Bank National Association, in its capacity as
agent (in such capacity, the "Agent") in Chicago, Illinois the aggregate unpaid
amount of all Loans made to the undersigned by the Bank pursuant to the Credit
Agreement referred to below (as shown on the Schedule attached hereto (and any
continuation thereof) or in the records of the Bank), such principal amount to
be payable on the dates set forth in the Credit Agreement.
The Company further promises to pay interest on the unpaid principal amount
of each Loan from the date of such Loan until such Loan is paid in full, payable
at the rates and at the times set forth in the Credit Agreement. Payments of
both principal and interest are to be made in lawful money of the United States
of America.
This Note evidences indebtedness incurred under, and is subject to the
terms and provisions of, the Amended and Restated Credit Agreement dated as of
March __, 2004 (as amended, restated, supplemented or otherwise modified from
time to time, the "Credit Agreement"; terms not otherwise defined herein are
used herein as defined in the Credit Agreement) by and among the Company,
certain financial institutions (including the Bank) and the Agent. Reference is
hereby made to such Credit Agreement reference hereby is made for a statement of
the terms and provisions under which this Note may or must be paid prior to its
due date or its due date accelerated.
This Note is made under and governed by the laws of the State of Illinois
applicable to contracts made and to be performed entirely within such State.
[This Note: (i) is given in substitution for, and not in repayment of, that
certain Note issued ______________ __, 20__ in the original principal amount of
$______________ made by the Company payable to the order of [the
Bank/_________________________] (the "Original Note") and (ii) shall not
constitute a novation of the indebtedness, liabilities or obligations evidenced
by the Original Note or any of the Obligations.]
- Remainder of Page Intentionally Left Blank -
[Signature Page Follows]
IN WITNESS WHEREOF, the Company has executed this [Amended and Substitute]
Note as of the day and year first written above.
ENERGY WEST, INCORPORATED, a Montana
corporation
By: ___________________________
Name: ___________________________
Title: ___________________________
Amended and Restated Credit Agreement
Schedule attached to [Amended and Substitute] Note dated ___________ __, 20__ of
Energy West, Incorporated, payable to the order of _____________
Date and Date and
Amount of Amount of
Loan or of Repayment or of Interest
Conversion from Conversion into Period/Unpaid
another type of another type of Maturity Principal Notation
Tranche Loan Loan Date Balance Made by
1. BASE RATE LOANS
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2. LIBOR LOANS
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Amended and Restated Credit Agreement