EXHIBIT 10.1
CREDIT AGREEMENT
DATED AS OF MAY 20, 2004
AMONG
TUFCO, L.P.
AS BORROWER,
TUFCO TECHNOLOGIES, INC.
AS PARENT,
THE BANKS,
AND
BANK ONE, NA
AS AGENT
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS 1
Section 1.1. Definitions 1
Section 1.2. Other Definitional Provisions 13
Section 1.3. Accounting Terms and Determinations 13
Section 1.4. Time of Day 13
ARTICLE 2. MULTIBANK REVOLVING CREDIT FACILITY 13
Section 2.1. Multibank Revolving Commitments 13
Section 2.2. Noteless Agreement, or Notes 14
Section 2.3. Repayment of Multibank Revolving Loans 14
Section 2.4. Use of Proceeds 14
Section 2.5. Revolving Commitment Fee 14
Section 2.6. Reduction or Termination of Revolving Commitments 15
ARTICLE 3. BANK ONE INDIVIDUAL REVOLVING CREDIT FACILITY 15
Section 3.1. Bank One Individual Revolving Commitment 15
Section 3.2. Noteless Agreement; or Notes 15
Section 3.3. Repayment of Bank One Individual Revolving Loans 16
Section 3.4. Use of Proceeds 16
Section 3.5. Bank One Individual Revolving Commitment Fee 16
Section 3.6. Reduction or Termination of Bank One Revolving
Individual Commitment 16
Section 3.7. Making of Bank One Individual Revolving Loans 16
Section 3.8. Borrower's Right to Select Credit Facility 17
ARTICLE 4. LETTERS OF CREDIT 17
Section 4.1. Commitment to Issue Commercial and Standby L/Cs 17
Section 4.2. Participation By Banks 17
Section 4.3. Request Procedure 18
Section 4.4. Letter of Credit Fees 18
Section 4.5. Funding of Drawings 18
Section 4.6. Reimbursements 18
Section 4.7. Reimbursement Obligations Absolute 19
Section 4.8. Issuer Responsibility 19
ARTICLE 5. INTEREST AND FEES 20
Section 5.1. Interest Rate 20
Section 5.2. Determinations of Margins and Fees 20
Section 5.3. Payment Dates 21
Section 5.4. Default Interest 22
Section 5.5. Conversions and Continuations of Accounts 22
Section 5.6. Computations 22
ARTICLE 6. MULTIBANK REVOLVING LOANS - ADMINISTRATIVE MATTERS 22
Section 6.1. Borrowing Procedure 22
Section 6.2. Minimum Amounts 22
Section 6.3. Certain Notices 23
Section 6.4. Prepayments 24
Section 6.5. Method of Payment 24
Section 6.6. Pro Rata Treatment 24
Section 6.7. Sharing of Payments 25
Section 6.8. Non-Receipt of Funds by the Agent 25
Section 6.9. Withholding Taxes 26
Section 6.10. Withholding Tax Exemption 26
Section 6.11. Participation Obligations Absolute; Failure 26
to Fund Participation
ARTICLE 7. YIELD PROTECTION AND ILLEGALITY 27
Section 7.1. Additional Costs 27
Section 7.2. Limitation on Eurodollar Accounts 28
Section 7.3. Illegality 29
Section 7.4. Treatment of Affected Loans 29
Section 7.5. Compensation 29
Section 7.6. Capital Adequacy 30
ARTICLE 8. CONDITIONS PRECEDENT 30
Section 8.1. Agreement 30
Section 8.2. All Extensions of Credit 32
ARTICLE 9. REPRESENTATIONS AND WARRANTIES 32
Section 9.1. Corporate Existence 32
Section 9.2. Financial Statements 32
Section 9.3. Corporate Action; No Breach 33
Section 9.4. Operation of Business 33
Section 9.5. Litigation and Judgments 33
Section 9.6. Rights in Properties; Liens 33
Section 9.7. Enforecability 33
Section 9.8. Approvals 34
Section 9.9. Debt 34
Section 9.10. Taxes 34
Section 9.11. Margin Securities 34
Section 9.12. ERISA 34
Section 9.13. Disclosure 34
Section 9.14. Subsidiaries 35
Section 9.15. Agreements 35
Section 9.16. Compliance with Laws 35
Section 9.17. Investment Company Act 35
Section 9.18. Public Utility Holding Company Act 35
Section 9.19. Environmental Matters 35
Section 9.20. Solvency 36
Section 9.21. Benefit Received 36
ARTICLE 10. POSITIVE COVENANTS 36
Section 10.1. Reporting Requirements 37
Section 10.2. Maintenance of Existence; Conduct of Business 38
Section 10.3. Maintenance of Properties 38
Section 10.4. Taxes and Claims 39
Section 10.5. Insurance 39
Section 10.6. Inspection Rights 39
Section 10.7. Keeping Books and Records 39
Section 10.8. Compliance with Laws 39
Section 10.9. Compliance with Agreements 39
Section 10.10. Further Assurances, Subsidiary Guarantees and Environment 39
Section 10.11. ERISA 40
ARTICLE 11. NEGATIVE COVENANTS 40
Section 11.1. Debt 40
Section 11.2. Limitation on Liens 41
Section 11.3. Mergers, Etc. 42
Section 11.4. Restrictions on Dividends and other Distributions 42
Section 11.5. Investments 43
Section 11.6. Limitation on Issuance of Capital Stock 44
Section 11.7. Transactions With Affiliates 44
Section 11.8. Disposition of Assets 44
Section 11.9. Lines of Business 45
Section 11.10. Sale and Leaseback 45
Section 11.11. Prepayment of Debt 45
ARTICLE 12. FINANCIAL COVENANTS 45
Section 12.1. Minimum Consolidated Tangible Net Worth 45
Section 12.2. Consolidate After Tax Net Income 45
ARTICLE 13. DEFAULT 46
Section 13.1. Events of Default 46
Section 13.2. Remedies 48
Section 13.3. Performance by the Agent 49
Section 13.4. Setoff 49
Section 13.5. Continuance of Default 50
Section 13.6. Cash Collateral 50
ARTICLE 14. THE AGENT 50
Section 14.1. Appointment, Powers and Immunities 50
Section 14.2. Rights of Agent as a Bank 50
Section 14.3. Defaults 51
Section 14.4. Indemnification 51
Section 14.5. Independent Credit Decisions 52
Section 14.6. Several Commitments 52
Section 14.7. Successor Agent 52
ARTICLE 15. MISCELLANEOUS 53
Section 15.1. Expenses 53
Section 15.2. Indemnification 53
Section 15.3. Limitation of Liability 54
Section 15.4. No Duty 54
Section 15.5. No Fiduciary Relationship 54
Section 15.6. Equitable Relief 54
Section 15.7. No Waiver; Cumulative Remedies 54
Section 15.8. Successors and Assigns 55
Section 15.9. Survival 58
Section 15.10. Entire Agreement; Amendment and Restatement 58
Section 15.11. Waivers; Amendments 58
Section 15.12. Maximum Interest Rate 59
Section 15.13. Notices 59
Section 15.14. Governing Law; Venue of Service of Process 60
Section 15.15. Counterparts 60
Section 15.16. Severability 60
Section 15.17. Headings 60
Section 15.18. Governmental Regulation 60
Section 15.19. Construction 61
Section 15.20. Independence of Covenants 61
Section 15.21. USA Patriot Act Notification 61
Section 15.22. Waiver of Jury Trial 61
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "Agreement"), dated as of May 20, 2004, is among
TUFCO, L.P., a limited partnership duly organized and validly existing under the
laws of the State of Delaware (the "Borrower"), TUFCO TECHNOLOGIES, INC., a
corporation duly organized under the laws of the State of Delaware ("Parent"),
each of the banks or other lending institutions which is or which may from time
to time become a signatory hereto or any successor or assignee thereof
(individually, a "Bank" and, collectively, the "Banks") and BANK ONE, NA,
individually as a Bank and as agent for itself and the other Banks (in its
capacity as agent, together with its successors in such capacity, the "Agent").
The parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
Section 1.1. Definitions. As used in this Agreement, the following terms have
the following meanings:
"Account" means either a Base Rate Account or a Eurodollar Account.
"Acquiring Company" has the meaning set forth in Section 11.3 of this Agreement.
"Additional Costs" has the meaning specified in Section 7.1.
"Adjusted Eurodollar Rate" means, for any Eurodollar Account for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) determined by the Agent to be equal to the Eurodollar Rate
for such Eurodollar Account for such Interest Period divided by 1 minus the
Reserve Requirement for such Eurodollar Account for such Interest Period.
"Adjustment Date" has the meaning specified in Section 5.2.
"Administrative Questionnaire" means an Administrative Questionnaire in a form
supplied by the Agent.
"Affected Accounts" has the meaning set forth in Section 7.4 of this Agreement.
"Affiliate" means, as to any Person, any other Person (a) that directly or
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, such Person; (b) that directly or indirectly
beneficially owns or holds ten percent (10%) or more of any class of voting
stock of such Person; or (c) ten percent (10%) or more of the voting stock of
which is directly or indirectly beneficially owned or held by the Person in
question. The term "control" means the possession, directly or indirectly, of
the power to direct or cause direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract, or
otherwise; provided, however, in no event shall the Agent or any Bank be deemed
an Affiliate of the Borrower or any Subsidiaries.
"Agent" has the meaning set forth in the introductory paragraph of this
Agreement and when
1
used to designate the issuer of any Letter of Credit, shall include any
Affiliate of Bank One, NA with respect to any Letters of Credit issued by such
Affiliate.
"Agreement" has the meaning set forth in the introductory paragraph of this
Agreement.
"Applicable Lending Office" means for each Bank and each Type of Account, the
lending office of such Bank (or of an Affiliate of such Bank) designated for
such Account below its name on the signature pages hereof or such other office
of such Bank (or of an Affiliate of such Bank) as such Bank may from time to
time specify to the Borrower and the Agent as the office by which its Revolving
Loans subject to Accounts of such Type are to be made and maintained.
"Applicable Rate" has the meaning set forth in Section 5.1.
"Approved Fund" has the meaning set forth in Section 15.8 of this Agreement.
"Arranger" means Banc One Capital Markets, Inc., a Delaware corporation, and its
successors, in its capacity as Lead Arranger and Sole Book Runner.
"Assigning Bank" has the meaning set forth in Section 15.8 of this Agreement.
"Assignment and Assumption" means an assignment and assumption entered into by a
Bank and its assignee and accepted by the Agent pursuant to Section 15.8, in
substantially the form of Exhibit "C".
"Bank" has the meaning set forth in the introductory paragraph of this
Agreement.
"Bank One Individual Revolving Commitment" means the separate commitment of Bank
One, NA on an individual basis to make revolving loans to the Borrower in an
aggregate principal amount of One Million Dollars ($1,000,000) pursuant to
Section 3.1 of this Agreement.
"Bank One Individual Revolving Loans" means the loans made by Bank One, NA on an
individual basis to the Borrower pursuant to the Bank One Individual Revolving
Commitment.
"Base Margin" has the meaning specified in Section 5.2.
"Base Rate" means, for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greater of (a) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1% or (b) the Prime Rate in effect on
such day. For purposes hereof, "Prime Rate" shall mean the rate of interest per
annum then most recently publicly announced from time to time by Bank One, NA or
its parent as its prime rate in effect at its Principal Office; each change in
the Prime Rate shall be effective on the date such change is publicly announced
as effective. "Federal Funds Effective Rate" shall mean, for any day, the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
released on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so released for any day which is a Business Day,
the arithmetic average (rounded upwards to the next 1/100th of 1%), as
determined by the Agent, of the quotations for the day of such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by it. If for any reason the Agent shall have determined
2
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate for any reason, including
the inability of the Agent to obtain sufficient quotations in accordance with
the terms thereof, the Base Rate shall be determined without regard to clause
(a) of the first sentence of this definition until the circumstances giving rise
to such inability no longer exist. Any change in the Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively. The Base Rate may not be any Bank's best or favored rate and
the Banks may make other loans to other Persons at rates lower than the Base
Rate.
"Base Rate Account" means a portion of a Revolving Loan that bears interest at a
rate based upon the Base Rate.
"Borrower" has the meaning set forth in the introductory paragraph of this
Agreement.
"Business Day" means (I) with respect to any borrowing, payment or rate
selection of Revolving Loans subject to Eurodollar Accounts, a day (other than a
Saturday or Sunday) on which banks generally are open in Chicago and New York
City for the conduct of substantially all of their commercial lending
activities, interbank wire transfers can be made on the Fedwire system and
dealings in United States dollars are carried on in the London interbank market
and (ii) for all other purposes, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago for the conduct of substantially all
of their commercial lending activities and interbank wire transfers can be made
on the Fedwire system.
"CLO" has the meaning set forth in Section 15.8 of this Agreement.
"Calculation Period" has the meaning specified in Section 5.2.
"Capital Lease Obligations" means, as to any Person, the obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property, which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP. For purposes of this Agreement, the amount of
such Capital Lease Obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
"Closing Date" means May 20, 2004.
"Code" means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated and rulings issued thereunder.
"Commercial and Standby L/C(s)" has the meaning specified in Section 4.1.
"Commercial and Standby L/C Liabilities" means, at any time, the aggregate
amount available for drawing under all outstanding Commercial and Standby L/Cs
and all unreimbursed drawings under Commercial and Standby L/Cs.
"Commitment Fee Rate" means the per annum rate determined in accordance with
Section 5.2.
3
"Commitment Percentage" means, as to any Bank, the percentage equivalent of a
fraction the numerator of which is the amount of the Multibank Revolving
Commitment of such Bank and the denominator of which is the aggregate amount of
the Multibank Revolving Commitments of all of the Banks provided that if the
Multibank Revolving Commitments have expired, been terminated or otherwise fully
funded, then the "Commitment Percentage" of each Bank is the percentage
equivalent of a fraction, the numerator of which is the outstanding principal
amount of the Multibank Revolving Loans of such Bank and the denominator of
which is the aggregate of the outstanding principal amount of all Multibank
Revolving Loans of all Banks.
"Compliance Certificate" means a certificate in substantially the form of
Exhibit "D" properly completed and executed by a Responsible Party of the
Parent.
"Consolidated After Tax Net Income" has the meaning specified in Section 12.2.
"Consolidated Net Income" shall mean consolidated net income without
consideration of income taxes.
"Consolidated Net Worth" shall mean, as of the date of any determination
thereof, the amount of shareholders' equity of Parent and its Subsidiaries as of
such date plus (or minus in the case of a deficit) the surplus and retained
earnings of Parent and its Subsidiaries as of such date, all determined on a
consolidated basis and in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean, as of the date of any
determination thereof, the sum of (a) Consolidated Net Worth as of such date
minus (b) the book value of all Intangible Assets of Parent and its Subsidiaries
as of such date, all determined on a consolidated basis and in accordance with
GAAP.
"Continue", "Continuation", and "Continued" shall refer to the continuation
pursuant to Section 5.5 of a Eurodollar Account as a Eurodollar Account from one
Interest Period to the next Interest Period.
"Contract Rate" has the meaning set forth in Section 15.12 of this Agreement.
"Convert", "Conversion", and "Converted" shall refer to a conversion pursuant to
Section 5.5 or Article 7 of one Type of Account into the other Type of Account.
"Debt" means as to any Person at any time (without duplication): (a) all
obligations of such Person for borrowed money; (b) all obligations of such
Person evidenced by bonds, notes, debentures, or other similar instruments; (c)
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person; (d) all obligations of
such Person to pay the deferred purchase price of property or services, except
trade accounts payable of such Person arising in the ordinary course of business
that are not past due by more than ninety (90) days or that are past due by more
than ninety (90) days but are being contested in good faith by appropriate
proceedings diligently pursued; (e) all Capital Lease Obligations of such
Person; (f) all Debt or other obligations of others Guaranteed by such Person;
(g) all obligations secured by a Lien existing on property owned by such Person,
whether or not the obligations secured thereby have been assumed by such Person
or are non-recourse to the credit of such Person; (h) all reimbursement
obligations of such Person (whether
4
contingent or otherwise) in respect of letters of credit, bankers' acceptances,
surety or other bonds, and similar instruments; (i) all liabilities of such
Person in respect of all unfunded vested benefits under any Plan; (j) all
obligations of such Person in respect of mandatory redemption or mandatory
dividend rights on capital stock (or other equity); (k) all obligations of such
Person, contingent or otherwise, for the payment of money under any noncompete,
consulting, performance based or similar agreement or any other similar
arrangements providing for the deferred payment of the purchase price for an
asset or assets; (l) all obligations of such Person under any agreement with
respect to any swap, forward, future or derivative transaction or option or
similar agreement involving, or settled by reference to, one or more rates,
currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk
or value or any similar transaction or any combination of these (the amount of
the obligations in respect of any agreement under this clause (l) shall, at any
time of determination and for all purposes under this Agreement, be the maximum
aggregate amount that such Person would be required to pay if such agreement
were terminated at such time giving effect to current market conditions
notwithstanding any contrary treatment in accordance with GAAP); (m) all
obligations of such Person under any Synthetic Lease; and (n) all other
obligations for borrowed money or other financial accommodations which are
required to be reflected as a liability on the balance sheet of a Person in
accordance with GAAP.
"Default" means an Event of Default or the occurrence of an event or condition
which with notice or lapse of time or both would become an Event of Default.
"Default Rate" means, in respect of any principal of any Revolving Loan, or any
other amount payable by the Borrower under any Loan Document which is not paid
when due (whether at stated maturity, by acceleration, or otherwise), a rate per
annum during the period commencing on the due date until such amount is paid in
full equal to the sum of two percent (2%) plus the Applicable Rate for Base Rate
Accounts as in effect from time to time (provided, that if such amount in
default is principal of a Revolving Loan subject to a Eurodollar Account and the
due date is a day other than the last day of an Interest Period therefor, the
"Default Rate" for such principal shall be, for the period from and including
the due date and to but excluding the last day of the Interest Period therefor,
two percent (2%) plus the interest rate for such Revolving Loan for such
Interest Period as provided in Section 5.1 hereof, and, thereafter, the rate
provided for above in this definition).
"Dollars" and "$" mean lawful money of the United States of America.
"EBITDA" means, for any period, the total of the following calculated for the
Parent and the Subsidiaries without duplication on a consolidated basis for such
period: (a) Consolidated Net Income; plus (b) any deduction for (or less any
gain from) income or franchise taxes included in determining Consolidated Net
Income; plus (c) interest expense (including the interest portion of Capital
Lease Obligations) deducted in determining Consolidated Net Income; plus (d)
amortization and depreciation expense deducted in determining Consolidated Net
Income.
"Environmental Laws" means any and all federal, state, and local laws,
regulations, and requirements pertaining to health, safety, or the environment,
as such laws, regulations, and requirements may be amended or supplemented from
time to time.
5
"Environmental Liabilities" means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs, and expenses, (including,
without limitation, all reasonable fees, disbursements and expenses of counsel,
expert and consulting fees and costs of investigation and feasibility studies),
fines, penalties, sanctions, and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute, including any
Environmental Law, permit, order, or agreement with any Governmental Authority
or other Person, arising from environmental, health, or safety conditions or the
Release or threatened Release of a Hazardous Material into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations and published interpretations thereunder.
"ERISA Affiliate" means any corporation, trade, or business which is a member of
the same controlled group of corporations (within the meaning of Section 414(b)
of the Code) as the Borrower or is under common control (within the meaning of
Section 414(c) of the Code) with the Borrower.
"Eurodollar Account" means a portion of a Revolving Loan that bears interest at
a rate based upon the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, with respect to any Eurodollar Account for any Interest
Period, the rate appearing on Page 3750 of the Dow ▇▇▇▇▇ Market Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Agent from
time to time for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the "LIBO Rate" with respect to such Eurodollar Account for
such Interest Period shall be the rate at which dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered by the
principal London office of the Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
"Eurodollar Rate Margin" has the meaning specified in Section 5.2.
"Event of Default" has the meaning specified in Section 13.1.
"Federal Funds Effective Rate" has the meaning specified in the definition of
Base Rate.
"Fiscal Quarters" means the four (4) periods falling in each Fiscal Year, each
such period three calendar months in duration with the first such period in any
Fiscal Year beginning on the first day of October and the last such period in
any Fiscal Year ending on the last day of September.
"Fiscal Year" means twelve (12) month period beginning on the first day of
October and ending on the last day of September of the following year.
6
"Foreign Bank" means any Bank that is organized under the laws of a jurisdiction
other than that in which the Borrower is located. For purposes of this
definition, the United States of America, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.
"GAAP" means generally accepted accounting principles, applied on a consistent
basis, as set forth in Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants and/or in statements of the
Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question. Accounting
principles are applied on a "consistent basis" when the accounting principles
applied in a current period are comparable in all material respects to those
accounting principles applied in a preceding period.
"Governmental Authority" means any nation or government, any state or political
subdivision thereof, and any entity exercising executive, legislative, judicial,
regulatory, or administrative functions of or pertaining to government.
"Guarantee" by any Person means any obligation, contingent or otherwise, of such
Person directly or indirectly guaranteeing any Debt or other obligation of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (b)
entered into for the purpose of assuring in any other manner the obligee of such
Debt or other obligation of the payment thereof or to protect the obligee
against loss in respect thereof (in whole or in part), provided that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning. The amount of any Guarantee shall be equal to the amount
of the obligations so guaranteed or otherwise supported or, if not a fixed and
determined amount, the maximum amount so guaranteed.
"Guarantors" means Tufco Technologies, Inc. and any Subsidiary of Tufco
Technologies, Inc. other than the Borrower including, without limitation, Tufco
LLC.
"Hazardous Material" means any substance, product, waste, pollutant, material,
chemical, contaminant, constituent, or other material which is or becomes
listed, regulated, or addressed under any Environmental Law.
"Indebtedness" has the meaning specified in Section 5.2.
"Indebtedness to EBITDA Ratio" means the ratio of Indebtedness to EBITDA as
determined and calculated in accordance with Section 5.2.
"Intangible Assets" shall mean all patents, trademarks, service marks,
copyrights, trade names, goodwill (including any amounts, however designated,
representing the cost of acquisition of business and investments in excess of
the book value thereof), unamortized debt discount and expense, unamortized bond
issuance costs, unamortized deferred charges, deferred research and
7
development costs, any write-up of asset value after the date of this Agreement,
organizational costs, noncompetition covenants, signing bonuses, and any other
assets treated as intangible assets under GAAP.
"Interest Period" means with respect to any Eurodollar Accounts, each period
commencing on the date such Account is established or Converted from a Base Rate
Account or the last day of the next preceding Interest Period with respect to
such Eurodollar Account, and ending on the numerically corresponding day in the
first, second, or third calendar month thereafter, as the Borrower may select as
provided in Section 5.5 or Section 6.1, except that each such Interest Period
which commences on the last Business Day of a calendar month (or on any day for
which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appropriate subsequent
calendar month. Notwithstanding the foregoing: (a) each Interest Period which
would otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (or if such succeeding Business Day falls in the next
succeeding calendar month, on the next preceding Business Day); (b) any Interest
Period in existence under a Revolving Loan which would otherwise extend beyond
the Revolving Termination Date shall end on the Revolving Termination Date; (c)
no more than six (6) Interest Periods shall be in effect at the same time; and
(d) no Interest Period for any Eurodollar Account shall have a duration of less
than one (1) month and, if the Interest Period would otherwise be a shorter
period, the related Eurodollar Account shall not be available hereunder.
"Joinder Agreement" means an agreement which has been or will be executed by a
Subsidiary as required hereby adding it as a party to the Master Guaranty in
substantially the form of Exhibit "B" attached hereto.
"Letters of Credit" means the Commercial and Standby L/Cs.
"Letter of Credit Liabilities" means the Commercial and Standby L/C Liabilities.
"Lien" means any lien, mortgage, security interest, tax lien, financing
statement, pledge, charge, hypothecation, assignment, preference, priority, or
other encumbrance of any kind or nature whatsoever (including, without
limitation, any conditional sale or title retention agreement), whether arising
by contract, operation of law, or otherwise.
"Loan Documents" means this Agreement, the Revolving Notes, the Master Guaranty,
and all other promissory notes, , guaranties, letters of credit, interest rate
protection agreements and other instruments, agreements, and other documentation
executed and delivered pursuant to or in connection with this Agreement.
"Master Guaranty" means that certain Master Guaranty Agreement dated as of May
20, 2004 executed by the Guarantors and any other subsidiary or other entity who
may become a party thereto pursuant to the execution and delivery of a Joinder
Agreement in favor of the Agent and the Banks, which is substantially in the
form of Exhibit "E", as the same may be amended or otherwise modified from time
to time.
"Material Adverse Effect" means (a) a material adverse effect on the business,
condition (financial or otherwise), operations, or properties of the Borrower
and the Subsidiaries taken as a
8
whole or (b) a material adverse effect on the ability of the Agent or any Bank
to enforce a material provision of the Loan Documents. In determining whether
any individual event could reasonably be expected to result in a Material
Adverse Effect, notwithstanding that such event does not itself have such
effect, a Material Adverse Effect shall be deemed to have occurred if the
cumulative effect of such event and all other then existing events could
reasonably be expected to result in a Material Adverse Effect.
"Maximum Rate" means, at any time and with respect to any Bank, the maximum rate
of nonusurious interest under applicable law that such Bank may charge the
Borrower. The Maximum Rate shall be calculated in a manner that takes into
account any and all fees, payments, and other charges contracted for, charged,
or received in connection with the Loan Documents that constitute interest under
applicable law. Each change in any interest rate provided for herein based upon
the Maximum Rate resulting from a change in the Maximum Rate shall take effect
without notice to the Borrower at the time of such change in the Maximum Rate.
For purposes of determining the Maximum Rate under Texas law, the applicable
rate ceiling shall be the weekly ceiling described in, and computed in
accordance with, Chapter 303 of the Texas Finance Code.
"Multibank Revolving Commitments" means the commitments by the Banks to the
Borrower with respect to the Multibank Revolving Commitments described in
Section 2.1 of this Agreement in the aggregate principal amount of Nine Million
Dollars ($9,000,000) at any one time outstanding up to but not exceeding the
proportionate amounts set forth opposite the name of each Bank on the signature
pages hereto under the heading "Revolving Commitments" or in the most recent
Assignment and Acceptance executed by such Bank, as the same may be reduced or
terminated pursuant to Section 2.6 or Section 13.2.
"Multibank Revolving Loans" means revolving loans made by the Banks to the
Borrower pursuant to the Multibank Revolving Commitments.
"Multiemployer Plan" means a multiemployer plan defined as such in Section 3(37)
of ERISA to which the Borrower or any ERISA Affiliate is making or accruing an
obligation to make contributions, or has within any of the preceding six (6)
years made or accrued an obligation to make contributions, and which is covered
by Title IV of ERISA.
"Notice of Default" has the meaning set forth in Section 14.3 of this Agreement.
"Obligated Party" means the Guarantors or any other Person (exclusive of the
Borrower) who is or becomes party to any agreement that guarantees or secures
payment and performance of the Obligations or any part thereof.
"Obligation" means all obligations, indebtedness, and liabilities of the
Borrower or any Obligated Party to the Agent and the Banks or any Affiliate of
the Agent or any Bank, or to any of the Agent, any Bank or any Affiliate of the
Agent or any Bank, arising pursuant to the following:
(i) any of the Loan Documents;
(ii) any agreement with respect to any swap, forward, future or derivative
transaction or option or
9
similar agreement involving, or settled by reference to, one or more rates,
currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk
or value or any similar transaction or any combination of these entered into by
the Agent or any Bank or any Affiliate thereof with the Borrower or any
Obligated Party; and
(iii) any deposit, lock box or cash or treasury management arrangements entered
into by any Bank or any Affiliate thereof with Borrower or any Obligated Party,
whether any of such obligations, indebtedness or liabilities are now existing or
hereafter arising, whether direct, indirect, related, unrelated, fixed,
contingent, liquidated, unliquidated, joint, several, or joint and several,
including, without limitation, the obligation of the Borrower to repay the
Revolving Loans, interest on the Revolving Loans and all fees, costs, and
expenses (including attorneys' fees and expenses) provided for in the
documentation relating thereto.
"Outstanding Multibank Revolving Credit" means, at any time of determination,
the sum of (a) the aggregate amount of Multibank Revolving Loans then
outstanding; plus (b) the aggregate amount of Commercial and Standby L/C
Liabilities (or when calculated with respect to a Bank, including the Agent as a
Bank, such Bank's participation or other interest in such Commercial and Standby
L/C Liabilities).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding
to all or any of its functions under ERISA.
"Parent" means Tufco Technologies, Inc.
"Participants" has the meaning specified in Section 15.8.
"Payment Date" has the meaning set forth in Section 4.4 of this Agreement.
"Payor" has the meaning set forth in Section 6.8 of this Agreement.
"Person" means any individual, corporation, business trust, association,
company, partnership, joint venture, Governmental Authority, or other entity.
"Plan" means any employee benefit plan (other than a Multiemployer Plan)
established or maintained by the Borrower or any ERISA Affiliate and to which
the Borrower or any ERISA Affiliate is making or accruing an obligation to make
contributions or has within any of the preceding six years made or accrued an
obligation to make contributions.
"Principal Office" means the principal office of the Agent, located at ▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Prohibited Transaction" means any transaction set forth in Section 406 or 407
of ERISA or Section 4975(c)(1) of the Code for which there does not exist a
statutory or administrative exemption.
"Quarterly Payment Date" means the last day of January, April, July and October
of each year,
10
the first of which shall be the first such day after the date of this Agreement.
"Register" has the meaning set forth in Section 15.8 of this Agreement.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulatory Change" means, with respect to any Bank, any change after the date
of this Agreement in United States federal, state, or foreign laws or
regulations (including Regulation D) or the adoption or making after such date
of any interpretations, directives, or requests applying to a class of banks
including such Bank of or under any United States federal or state, or any
foreign, laws or regulations (whether or not having the force of law) by any
Governmental Authority or monetary authority charged with the interpretation or
administration thereof.
"Reimbursement Obligations" means the obligation of the Borrower to reimburse
the Agent for any demand for payment or drawing under a Letter of Credit.
"Related Parties" means, with respect to a Bank or the Agent, such Bank's or the
Agent's Affiliates and the respective directors, officers, employees, agents and
advisors of such Bank or the Agent and such Bank's or the Agent's Affiliates.
"Release" means, as to any Person, any release, spill, emission, leaking,
pumping, injection, deposit, disposal, disbursement, leaching, or migration of
Hazardous Materials into the indoor or outdoor environment or into or out of
property owned by such Person, including, without limitation, the movement of
Hazardous Materials through or in the air, soil, surface water, ground water, or
property in violation of Environmental Laws.
"Released Parties" has the meaning set forth in Section 15.10 of this Agreement.
"Remedial Action" means all actions required to (a) cleanup, remove, treat, or
otherwise address Hazardous Materials in the indoor or outdoor environment, (b)
prevent the Release or threat of Release or minimize the further Release of
Hazardous Materials so that they do not migrate or endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment, or (c)
perform pre-remedial studies and investigations and post-remedial monitoring and
care.
"Required Banks" means any combination of Banks having, in the aggregate, (a)
fifty-one percent (51%) or more of the Revolving Commitments or (b) if the
Revolving Commitments have terminated, expired or otherwise been fulfilled,
fifty-one percent (51%) or more of the outstanding principal amount of the
Revolving Loans.
"Required Payment" has the meaning set forth in Section 6.8 of this Agreement.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, excluding however, any such events where the thirty (30) day notice
requirement of Section 4043 of ERISA has been waived either by statute or by the
PBGC.
"Reserve Requirement" means, for any Eurodollar Account for any Interest Period
therefor, the average maximum rate at which reserves (including any marginal,
supplemental, or emergency
11
reserves) are required to be maintained during such Interest Period under
Regulation D by member banks of the Federal Reserve System in New York City with
deposits exceeding one billion Dollars against "Eurocurrency Liabilities" as
such term is used in Regulation D. Without limiting the effect of the foregoing,
the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks by reason of any Regulatory Change against any
category of liabilities which includes deposits by reference to which the
Adjusted Eurodollar Rate is to be determined or any category of extensions of
credit or other assets which include Eurodollar Accounts.
"Responsible Party" means with respect to any Person, the president, chief
financial officer or chief accounting officer of such Person.
"Revolving Commitment" means, as to each Bank, the obligation of such Bank to
make advances of funds in an aggregate principal amount at any one time
outstanding up to but not exceeding the amount set forth opposite the name of
such Bank on the signature pages hereto under the heading "Revolving Commitment"
or in the most recent Assignment and Acceptance executed by such Bank, as the
same may be reduced or terminated pursuant to Section 2.6 or Section 13.2. The
aggregate amount of the Revolving Commitments of all Banks on the Closing Date
equals Ten Million Dollars ($10,000,000).
"Revolving Loans" means, as to any Bank, the advances made by such Bank pursuant
to Section 2.1 with respect to Multibank Revolving Loans and the advances made
by Bank One, NA individually with respect to Bank One Individual Revolving Loans
pursuant to Section 3.1.
"Revolving Notes" means the Notes provided for by Sections 2.2 and 3.2 and all
amendments or other modifications thereof.
"Revolving Termination Date" means May 18, 2007, or such earlier date on which
the Revolving Commitments terminate as provided in this Agreement.
"Subsidiary" means any corporation (or other entity) of which at least a
majority of the outstanding shares of stock (or other ownership interests)
having by the terms thereof ordinary voting power to elect a majority of the
board of directors (or similar governing body) of such corporation (or other
entity) (irrespective of whether or not at the time stock (or other ownership
interests) of any other class or classes of such corporation (or other entity)
shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled by the
Parent or one or more of the Subsidiaries or by the Parent and one or more of
the Subsidiaries.
"Synthetic Lease" means any lease of (or other arrangement conveying the right
to use) real or personal property, or a combination thereof, which lease is
required or is permitted to be classified and accounted for as an operating
lease under GAAP but which is intended by the parties thereto for tax,
bankruptcy, regulatory, commercial law, real estate law and all other purposes
as a financing arrangement.
"Transferring Subsidiary" has the meaning set forth in Section 11.3 of this
Agreement.
"Type" means either type of Account (i.e., either a Base Rate Account or
Eurodollar Account).
12
"UCC" means the Uniform Commercial Code as in effect in the State of Wisconsin.
Section 1.2. Other Definitional Provisions. All definitions contained in this
Agreement are equally applicable to the singular and plural forms of the terms
defined. The words "hereof", "herein", and "hereunder" and words of similar
import referring to this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Unless otherwise specified, all
Article and Section references pertain to this Agreement. Terms used herein that
are defined in the UCC, unless otherwise defined herein, shall have the meanings
specified in the UCC.
Section 1.3. Accounting Terms and Determinations. Except as otherwise expressly
provided herein, all accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial matters
required to be delivered to the Agent and the Banks hereunder shall be prepared,
in accordance with GAAP on a consistent basis. All calculations made for the
purposes of determining compliance with the provisions of this Agreement shall
be made by application of GAAP on a consistent basis. To enable the ready and
consistent determination of compliance by the Parent with its obligations under
this Agreement, the Parent will not change the manner in which either the last
day of its Fiscal Year or the last days of the first three Fiscal Quarters of
its Fiscal Year is calculated. In the event any changes in accounting principles
required by GAAP or recommended by the Parent's certified public accountants and
implemented by the Parent occur and such changes result in a change in the
method of the calculation of financial covenants, standards, or terms under this
Agreement, then the Parent, the Agent, and the Banks agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such changes with the desired result that the criteria for
evaluating such covenants, standards, or terms shall be the same after such
changes as if such changes had not been made. Until such time as such an
amendment shall have been executed and delivered by the Agent, the Parent, and
the Banks, all financial covenants, standards, and terms in this Agreement shall
continue to be calculated or construed as if such changes had not occurred.
Section 1.4. Time of Day. Unless otherwise indicated, all references in this
Agreement to times of day shall be references to Chicago, Illinois time.
ARTICLE 2.
MULTIBANK REVOLVING CREDIT FACILITY
Section 2.1. Multibank Revolving Commitments. Subject to the terms and
conditions of this Agreement, each Bank severally agrees to make one or more
advances to the Borrower from time to time from and including the Closing Date
to but excluding the Revolving Termination Date in an aggregate principal amount
at any time outstanding up to but not exceeding the amount of such Bank's
Multibank Revolving Commitment as then in effect; provided, however:
(a) the Outstanding Multibank Revolving Credit applicable to a Bank shall not at
any time exceed such Bank's Multibank Revolving Commitment; and
(b) the Outstanding Multibank Revolving Credit shall not at any time exceed the
aggregate of the
13
Multibank Revolving Commitments.
Subject to the foregoing limitations, and the other terms and provisions of this
Agreement, the Borrower may borrow, prepay, and reborrow hereunder the amount of
the Multibank Revolving Commitments and may establish Base Rate Accounts and
Eurodollar Accounts thereunder and, until the Revolving Termination Date, the
Borrower may Continue Eurodollar Accounts established under the Multibank
Revolving Loans or Convert Accounts established under the Multibank Revolving
Loans of one Type into Accounts of the other Type. Accounts of each Type under
the Multibank Revolving Loan made by each Bank shall be established and
maintained at such Bank's Applicable Lending Office for Revolving Loans of such
Type.
Section 2.2. Noteless Agreement; or Notes. (i) Each Bank shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Bank resulting from each advance made by
such Bank from time to time, including the amounts of principal and interest
payable and paid to such Bank from time to time hereunder.
(ii) The Agent shall also maintain accounts in which it will record (a)
the amount of each advance made hereunder, the Type thereof and the Interest
Period with respect thereto, (b) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Bank hereunder
and (c) the amount of any sum received by the Agent hereunder from the Borrower
and each Bank's share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided; however, that the failure
of the Agent or any Bank to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Obligations
in accordance with their terms.
(iv) Any Bank may request that its advances be evidenced by a promissory
note in substantially the form of Exhibit A-2.2 (a "Note"). In such event, the
Borrower shall prepare, execute and deliver to such Bank such Note payable to
the order of such Bank. Thereafter, the advances evidenced by such Note and
interest thereon shall at all times, prior to any assignment, be represented by
one or more Notes payable to the order of the payee named therein, except to the
extent that any such Bank subsequently returns any such Note for cancellation
and requests that such advances once again be evidenced as described in
paragraphs (i) and (ii) above.
Section 2.3. Repayment of Multibank Revolving Loans. The Borrower shall pay to
the Agent for the account of the Banks the outstanding principal amount of all
of the Multibank Revolving Loans on the Revolving Termination Date.
Section 2.4. Use of Proceeds. The proceeds of the Multibank Revolving Loans
shall be used by the Borrower for working capital, capital expenditures and
other general corporate purposes.
Section 2.5. Revolving Commitment Fee. The Borrower agrees to pay to the Agent
for the account of each Bank a commitment fee on the daily average unused amount
of such Bank's Multibank Revolving Commitment for the period from and including
the Closing Date to and including the Revolving Termination Date, at a rate
equal to the Commitment Fee Rate as determined in accordance with Section 5.2.
For the purpose of calculating the commitment fee
14
hereunder, the Multibank Revolving Commitments shall be deemed utilized by all
Outstanding Multibank Revolving Credit. Accrued commitment fees under this
Section 2.5 shall be payable in arrears on each Quarterly Payment Date and on
the Revolving Termination Date.
Section 2.6. Reduction or Termination of Revolving Commitments. The Borrower
shall have the right to terminate or reduce in part the unused portion of the
Multibank Revolving Commitments at any time and from time to time, provided
that: (a) the Borrower shall give notice of each such termination or reduction
as provided in Section 6.3; and (b) each partial reduction shall be in an
aggregate amount at least equal to Two Hundred Fifty Thousand ($250,000). The
Multibank Revolving Commitments may not be reinstated after they have been
terminated or reduced. The Banks shall have no obligation or commitment to
extend the Revolving Termination Date.
ARTICLE 3.
BANK ONE INDIVIDUAL REVOLVING CREDIT FACILITY
Section 3.1. Bank One Individual Revolving Commitment. Subject to the terms and
conditions of this Agreement, Bank One, NA individually agrees to make one or
more advances to the Borrower from time to time from and including the Closing
Date to but excluding the Revolving Termination Date in an aggregate principal
amount at any time outstanding up to but not exceeding the amount of the Bank
One Individual Revolving Commitment.
Subject to the foregoing limitation, the Borrower may borrow, prepay, and
reborrow hereunder the amount of the Bank One Individual Revolving Commitment
and may establish Base Rate Accounts thereunder.
Section 3.2. Noteless Agreement; or Note. (i) Bank One, NA shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to Bank One, NA resulting from each Bank One
Individual Revolving Loan made by such Bank from time to time, including the
amounts of principal and interest payable and paid to such Bank from time to
time thereunder.
(ii) Bank One, NA shall also maintain accounts in which it will record (a)
the amount of each Bank One Individual Revolving Loan made hereunder, (b) the
amount of any principal or interest due and payable or to become due and payable
from the Borrower to Bank One, NA thereunder and (c) the amount of any sum
received by Bank One, NA hereunder from the Borrower.
(iii) The entries maintained in the accounts pursuant to paragraphs (i)
and (ii) above shall be prima facie evidence of the existence and amounts of the
Obligations therein recorded; provided; however that the failure of Bank One, NA
to maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrower to repay the Obligations in accordance with their
terms.
(iv) Bank One, NA may request that its Bank One Individual Revolving Loans
be evidenced by a promissory note in substantially the form of Exhibit A-3.2 (a
"Note"). In such event, the Borrower shall prepare, execute and deliver to Bank
One, NA such Note payable to the order of Bank One, NA. Thereafter, the Bank One
Individual Revolving Loan evidenced by
15
such Note and interest thereon shall at all times, prior to any assignment, be
represented by the Note payable to the order of Bank One, NA, except to the
extent that Bank One, NA subsequently returns any such Note for cancellation and
requests that such Bank One Individual Revolving Loan once again be evidenced as
described in paragraphs (i) and (ii) above.
Section 3.3. Repayment of Bank One Individual Revolving Loans. The Borrower
shall pay to Bank One, NA the outstanding principal amount of all of the Bank
One Individual Revolving Loans on the Revolving Termination Date.
Section 3.4. Use of Proceeds. The proceeds of the Bank One Individual Revolving
Loans shall be used by the Borrower for working capital, capital expenditures
and other general corporate purposes.
Section 3.5. Bank One Individual Revolving Commitment Fee. The Borrower agrees
to pay to Bank One, NA a commitment fee on the daily average unused amount of
the Bank One Individual Revolving Commitment for the period from and including
the Closing Date to and including the Revolving Termination Date, at a rate
equal to the Commitment Fee Rate as determined in accordance with Section 5.2.
Accrued commitment fees under this Section 3.5 shall be payable in arrears on
each Quarterly Payment Date and on the Revolving Termination Date.
Section 3.6. Reduction or Termination of Bank One Revolving Individual
Commitment. The Borrower shall have the right to terminate or reduce in part the
unused portion of the Bank One Revolving Individual Commitment at any time and
from time to time, provided, that: (a) the Borrower shall give notice of each
such termination or reduction as provided in Section 6.3; and (b) each partial
reduction shall be in an aggregate amount at least equal to Two Hundred Fifty
Thousand ($250,000). The Bank One Revolving Individual Commitment may not be
reinstated after it has been terminated or reduced. Bank One, NA shall have no
obligation or commitment to extend the Revolving Termination Date.
Section 3.7. Making of Bank One Individual Revolving Loans. Pursuant to a
Treasury Management Services Agreement made by and between the Borrower and Bank
One, NA and a Bank One - One Sweep - Loan and Investment Authorization
Agreement, the Borrower has requested and authorized Bank One, NA: (a) to apply
any collected balances (after funding advances) in excess of a mutually
predetermined amount (the "Borrower's Target Balance") remaining at the end of
any day in the Borrower's operating account number 660613787 to the repayment of
the principal balance of the Borrower's outstanding Bank One Individual
Revolving Loans and (b) Bank One, NA's shall make Bank One Individual Revolving
Loans to the Borrower hereunder at the end of any day in which the Borrower
shall have an overdraft (negative ledger balance) or a balance otherwise less
than the Borrower's Target Balance (a "Deficiency Amount") after crediting all
deposits received in immediately available funds and debiting all withdrawals
made and checks presented against such operating account and honored by Bank
One, NA as of such date, which Bank One Individual Revolving Loans shall be in
the amount of the Deficiency Amount(s), without any other request or
authorization therefore from the Borrower and without notice to the Borrower. A
Bank One Individual Revolving Loan Notice shall not be required in connection
with a Bank One Individual Revolving Loan made to cover any Deficiency Amount in
the Borrower's operating account on a day to day basis. Unless Bank One, NA
determines that any applicable condition of this Agreement has not been
satisfied,
16
Bank One, NA will make the proceeds of each Bank One Individual Revolving Loan
available to the Borrower at the end of each day by crediting such funds to a
demand deposit account of the Borrower at Bank One, NA as specified by the
Borrower (or such other account mutually agreed upon in writing between Bank
One, NA and the Borrower ). If Bank One, NA makes a new Bank One Individual
Revolving Loan to the Borrower hereunder on a day on which the Borrower is
required to or has elected to repay all or any part of an outstanding Bank One
Individual Revolving Loan to the Borrower from Bank One, NA, Bank One, NA shall
apply the proceeds of its new Bank One Individual Revolving Loan to make such
repayment and only an amount equal to the difference (if any) between the amount
being borrowed and the amount being repaid shall be made available by Bank One,
NA to the Borrower. The Borrower hereby authorizes Bank One, NA to rely on
telephonic, facsimile or written instructions of any person identifying himself
or herself as a person authorized to request a Bank One Individual Revolving
Loan or to make a repayment hereunder, and on any signature which Bank One, NA
believes to be genuine, and the Borrower shall be bound thereby in the same
manner as if such person were actually authorized or such signature were
genuine. The Borrower agrees to indemnify Bank One, NA and hold it harmless from
and against any and all claims, demands, damages, liabilities, losses, costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) relating to or arising out of or in connection with the acceptance of
instructions for making Bank One Individual Revolving Loans or making repayments
hereunder unless such acceptance results from the gross negligence or willful
misconduct of Bank One, NA, as determined by a Court of competent jurisdiction.
Section 3.8. Borrower's Right to Select Credit Facility. The Borrower, in its
unrestricted sole discretion shall at all times have the right to select whether
it wishes to utilize the Bank One Individual Revolving Commitment or the
Multibank Revolving Commitments. Any decision made by the Borrower in this
regard shall be binding upon the Banks.
ARTICLE 4.
LETTERS OF CREDIT
Section 4.1. Commitment to Issue Commercial and Standby L/Cs. The Borrower may
utilize the Revolving Commitments by requesting that the Agent issue, and the
Agent, subject to the terms and conditions of this Agreement, shall issue,
commercial, standby or documentary letters of credit for the Borrower's or one
of the Subsidiaries' account (such letters of credit (the "Commercial and
Standby L/Cs"); provided, however:
(a) the aggregate amount of outstanding Commercial and Standby L/C Liabilities
shall not at any time exceed One Million Dollars ($1,000,000);
(b) the Outstanding Multibank Revolving Credit shall not at any time exceed the
aggregate of the Multibank Revolving Commitments; and
(c) the Outstanding Multibank Revolving Credit applicable to a Bank shall not at
any time exceed such Bank's Multibank Revolving Commitment.
Section 4.2. Participation By Banks. Upon the date of issue of any Letter of
Credit, the Agent shall be deemed, without further action by any party hereto,
to have sold to each other Bank, and
17
each other Bank shall be deemed, without further action by any party hereto, to
have purchased from the Agent a participation to the extent of such Bank's
Commitment Percentage in such Letter of Credit and the related Letter of Credit
Liabilities.
Section 4.3. Request Procedure. The Borrower shall give the Agent at least three
(3) Business Days irrevocable prior notice (effective upon receipt) specifying
the date of each Letter of Credit and the nature of the transactions to be
supported thereby. The Agent shall notify each other Bank of the contents of the
Letter of Credit and of such Bank's Commitment Percentage of the amount of the
proposed Letter of Credit in accordance with Section 6.6. Each Letter of Credit
shall have an expiration date that does not extend beyond the earlier of (i) one
(1) year from the date of its issuance, provided that any Letter of Credit may
provide for the renewal of the expiration date thereof for additional one-year
periods (which shall in no event extend the expiration date thereof beyond the
date provided for in the next clause (ii)) or (ii) a date which is five (5) days
prior to the Revolving Termination Date. Each Letter of Credit shall be payable
in Dollars, must support a transaction entered into in the ordinary course of
the Borrower's business and shall be issued pursuant to such documentation as
the Agent may require, including, without limitation, the Agent's standard form
letter of credit request and reimbursement agreement; provided, that, in the
event of any conflict between the terms of such agreement and the other Loan
Documents, the terms of the other Loan Documents shall control.
Section 4.4. Letter of Credit Fees. The Borrower will pay to the Agent for the
account of the Banks a letter of credit fee on the amount available for drawings
under each standby Letter of Credit, such standby letter of credit fee: (i) to
be paid in arrears on each Quarterly Payment Date following the date the standby
Letter of Credit is issued until the date of expiration or termination thereof
(each such date herein a "Payment Date") and (ii) to be calculated for the
period from and including the preceding Payment Date (or with respect to the
first such payment, from and including the date of issuance of the standby
Letter of Credit) to and excluding the earlier of the next Payment Date or the
date of expiration or termination of the standby Letter of Credit at a rate
equal to the Eurodollar Rate Margin. After receiving any payment of any fees
under this Section 4.4 attributable to a standby Letter of Credit, the Agent
will promptly pay to each Bank such Bank's Commitment Percentage of the amount
of such fees so received.
With respect to commercial Letters of Credit, the Borrower shall pay to the
Agent for the account of the Banks a letter of credit fee in such amounts as is
customarily charged by the Agent for issuance of commercial Letters of Credit.
Section 4.5. Funding of Drawings. Upon receipt from the beneficiary of any
Letter of Credit of any demand for payment or other drawing under such Letter of
Credit, the Agent shall promptly notify the Borrower and each Bank as to the
amount to be paid as a result of such demand or drawing and the respective
payment date. Not later than 12:30 p.m. on the applicable payment date, each
Bank will make available to the Agent, at the Principal Office, in immediately
available funds, an amount equal to such Bank's Commitment Percentage of the
amount to be paid as a result of a demand or drawing under the Letter of Credit
even if the conditions to a Loan under Article 8 hereof have not been satisfied.
Section 4.6. Reimbursements. The Borrower shall be irrevocably and
unconditionally obligated to immediately reimburse the Agent for any amounts
paid by the Agent upon any demand for payment or drawing under any Letter of
Credit, without (except as specifically set forth in this
18
Section 4.6) presentment, demand, protest, or other formalities of any kind. All
payments on the Reimbursement Obligations shall be made: (i) if no Default has
occurred or the Agent otherwise elects, by Revolving Loans made automatically as
Base Rate Accounts in the amount equal to the lesser of (A) such Reimbursement
Obligations or (B) the difference of the aggregate Revolving Commitments minus
the Outstanding Revolving Credit or (ii) if a Default has occurred and the Agent
has not made the election under clause (i), by the Borrower to the Agent at the
Principal Office for the account of the Agent in Dollars and in immediately
available funds, without setoff, deduction or counterclaim not later than 3:00
p.m. on the date of the corresponding payment under such Letter of Credit;
provided, that in the case of this clause (ii) only, the Agent has provided
notice to the Borrower prior to 12:00 noon on such day that such payment is due.
In the event such notice is received after 12:00 noon on a Business Day, such
payment shall be due not later than 3:00 p.m. on the next succeeding Business
Day. The Agent will pay to each Bank such Bank's Commitment Percentage of all
amounts received from the Borrower for application in payment, in whole or in
part, to the Reimbursement Obligation in respect of any Letter of Credit, but
only to the extent such Bank has made payment to the Agent in respect of such
Letter of Credit pursuant to Section 4.5.
Section 4.7. Reimbursement Obligations Absolute. The Reimbursement Obligations
of the Borrower under this Agreement shall be absolute, unconditional, and
irrevocable, and shall be performed strictly in accordance with the terms of the
Loan Documents under all circumstances whatsoever and the Borrower hereby waives
any defense to the payment of the Reimbursement Obligations based on any
circumstance whatsoever, including without limitation, in either case, the
following circumstances: (i) any lack of validity or enforceability of any
Letter of Credit or any other Loan Document; (ii) any amendment or waiver of or
any consent to or departure from any Loan Document; (iii) the existence of any
claim, set-off, counterclaim, defense or other rights which the Borrower, any
Obligated Party, or any other Person may have at any time against any
beneficiary of any Letter of Credit, the Agent, any Bank, or any other Person,
whether in connection with any Loan Document or any unrelated transaction; (iv)
any statement, draft, or other documentation presented under any Letter of
Credit proving to be forged, fraudulent, invalid, or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect whatsoever;
or (v) any other circumstance whatsoever, whether or not similar to any of the
foregoing; provided that Reimbursement Obligations with respect to a Letter of
Credit may be subject to avoidance by the Borrower if the Borrower proves in a
final nonappealable judgment that it was damaged and that such damage arose
directly from the Agent's willful misconduct or gross negligence in determining
whether the documentation presented under the Letter of Credit in question
complied with the terms thereof.
Section 4.8. Issuer Responsibility. The Borrower assumes all risks of the acts
or omissions of any beneficiary of any Letter of Credit with respect to its use
of such Letter of Credit. Neither the Agent, any Bank nor any of their
respective officers or directors shall have any responsibility or liability to
the Borrower or any other Person for: (a) the failure of any draft to bear any
reference or adequate reference to any Letter of Credit, or the failure of any
documents to accompany any draft at negotiation, or the failure of any Person to
surrender or to take up any Letter of Credit or to send documents apart from
drafts as required by the terms of any Letter of Credit, or the failure of any
Person to note the amount of any instrument on any Letter of Credit, each of
which requirements, if contained in any Letter of Credit itself, it is agreed
may be waived by the Agent; (b) errors, omissions, interruptions, or delays in
transmission or delivery of any messages; (c) the validity, sufficiency, or
genuineness of any draft or other document, or any endorsement(s)
19
thereon, even if any such draft, document or endorsement should in fact prove to
be in any and all respects invalid, insufficient, fraudulent, or forged or any
statement therein is untrue or inaccurate in any respect; or (d) any other
circumstance whatsoever in making or failing to make any payment under a Letter
of Credit. Notwithstanding the forgoing, the Borrower shall have a claim against
the Agent, and the Agent shall be liable to the Borrower, to the extent of any
direct, but not indirect, consequential or punitive, damages suffered by the
Borrower which the Borrower proves in a final nonappealable judgment were caused
by (i) the Agent's willful misconduct or gross negligence in determining whether
documents presented under any Letter of Credit complied with the terms thereof
or (ii) the Agent's willful failure to pay under any Letter of Credit after
presentation to it of documentation strictly complying with the terms and
conditions of such Letter of Credit. The Agent may accept documents that appear
on their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
ARTICLE 5.
INTEREST AND FEES
Section 5.1. Interest Rate. Subject to Section 15.12, the Borrower shall pay to
the Agent for the account of each Bank interest on the unpaid principal amount
of each Revolving Loan made by such Bank for the period commencing on the date
of such Revolving Loan to but excluding the date such Revolving Loan is due, at
a fluctuating rate per annum equal to the Applicable Rate. The term "Applicable
Rate" means (i) during the period that such Revolving Loans or portions thereof
are subject to a Base Rate Account, the Base Rate plus the Base Margin and (ii)
during the period that such Revolving Loans or portions thereof are subject to a
Eurodollar Account, the Adjusted Eurodollar Rate plus the Eurodollar Rate
Margin.
Section 5.2. Determinations of Margins and Fees. The margins identified in
Section 5.1 and the fees payable under Sections 2.5 and 3.5 shall be defined and
determined as follows:
(a) "Base Margin" shall mean (i) during the period commencing on the Closing
Date and ending on but not including the first Adjustment Date (as defined
below), zero percent (0%) per annum and (ii) during each period, from and
including one Adjustment Date to but excluding the next Adjustment Date (herein
a "Calculation Period"), the percent per annum set forth in the table below in
this Section 5.2 under the heading "Base Margin" opposite the Indebtedness to
EBITDA Ratio which corresponds to the Indebtedness to EBITDA Ratio set forth in,
and as calculated in accordance with, the applicable Compliance Certificate.
(b) "Commitment Fee Rate" shall mean (i) during the period commencing on the
Closing Date and ending on but not including the first Adjustment Date, one
quarter percent (0.25%) per annum and (ii) during each Calculation Period, the
percent per annum set forth in the table below under the heading "Commitment
Fee" opposite the Indebtedness to EBITDA Ratio which corresponds to the
Indebtedness to EBITDA Ratio set forth in, and as calculated in accordance with,
the applicable Compliance Certificate.
(c) "Eurodollar Rate Margin" shall mean (i) during the period commencing on the
Closing Date and ending on but not including the first Adjustment Date, one and
one quarter percent (1.25%) per annum and (ii) during each Calculation Period,
the percent per annum set forth in the table
20
below under the heading "Eurodollar Margin" opposite the Indebtedness to EBITDA
Ratio which corresponds to the Indebtedness to EBITDA Ratio set forth in, and as
calculated in accordance with, the applicable Compliance Certificate.
Indebtedness to EBITDA Ratio Base Margin Commitment Fee Eurodollar Rate Margin
---------------------------- ----------- -------------- ----------------------
Greater than or equal to 3.00 0% 0.375% 2.00%
Greater than 2.50
but less than 3.00 0% 0.375% 1.75%
Greater than or equal to 2.00
but less than or equal to 2.50 0% 0.250% 1.50%
Less than 2.00 0% 0.250% 1.25%
Upon delivery of the Compliance Certificate pursuant to Section 10.1(c) in
connection with the financial statements of the Parent required to be delivered
pursuant to Section 10.1(b) at the end of each Fiscal Quarter commencing with
such Compliance Certificate delivered with respect to the Fiscal Quarter ending
on September 30, 2004, the Base Margin, the Eurodollar Rate Margin (for Interest
Periods commencing after the applicable Adjustment Date) and the Commitment Fee
Rate shall automatically be adjusted in accordance with the Indebtedness to
EBITDA Ratio set forth therein and the table set forth above, such automatic
adjustment to take effect as of the fifth Business Day after the receipt by the
Agent of the related Compliance Certificate pursuant to Section 10.1(c) (each
such Business Day when such margins or fees change pursuant to this sentence or
the next following sentence, herein an "Adjustment Date"). If the Borrower fails
to deliver such Compliance Certificate which so sets forth the Indebtedness to
EBITDA Ratio within the period of time required by Section 10.1(c): (i) the
Eurodollar Rate Margin (for Interest Periods commencing after the applicable
Adjustment Date) shall automatically be adjusted to two percent (2.00%) per
annum; and (ii) the Commitment Fee Rate shall automatically be adjusted to
three-eighths of one percent (0.375%) per annum, such automatic adjustments to
take effect as of the fifth Business Day after the last day on which the
Borrower was required to deliver the applicable Compliance Certificate in
accordance with Section 10.1(c) and to remain in effect until subsequently
adjusted in accordance herewith upon the delivery of a Compliance Certificate.
The phrase "Indebtedness to EBITDA Ratio" means the ratio, calculated as of the
last day of each Fiscal Quarter, of Indebtedness outstanding as of such day to
the EBITDA for the four (4) Fiscal Quarters immediately preceding (and
including) such Fiscal Quarter. As used in this Section 5.2, "Indebtedness"
means, at the time of determination, without duplication, the sum of the
following determined for Parent and the Subsidiaries on a consolidated basis
(without duplication): (a) all obligations for borrowed money; (b) all
obligations of such Person evidenced by bonds, notes, debentures, or other
similar instruments; (c) all Capital Lease Obligations; (d) all unpaid and
liquidated reimbursement obligations with respect to letter of credit and the
face amount of all undrawn, outstanding letters of credit (including without
limitation, the Letters of Credit, unless the Debt secured by any such letter of
credit is included in either clause (a) or (b) above or the following clause
(e)); and (e) all Debt arising under Synthetic Leases.
Section 5.3. Payment Dates. Accrued interest on the Revolving Loans shall be due
and payable
21
as follows: (i) in the case of Revolving Loans subject to Base Rate Accounts,
the last day of each month and on the Revolving Termination Date; and (ii) in
the case of Revolving Loans subject to Eurodollar Accounts and with respect to
each such Account, on the last day of such Interest Period and the Revolving
Termination Date.
Section 5.4. Default Interest. Notwithstanding the foregoing, the Borrower will
pay to the Agent for the account of each Bank interest at the applicable Default
Rate on any principal of any Revolving Loan made by such Bank, and (to the
fullest extent permitted by law) any other amount payable by the Borrower under
any Loan Document to or for the account of the Agent or such Bank, that is not
paid in full on the date due (whether at stated maturity, by acceleration, or
otherwise), for the period from and including the due date thereof to but
excluding the date the same is paid in full. Interest payable at the Default
Rate shall be payable from time to time on demand.
Section 5.5. Conversions and Continuations of Accounts. Subject to Section 6.2,
the Borrower shall have the right from time to time to Convert all or part of
any Base Rate Account in existence under a Revolving Loan into a Eurodollar
Account under the same Revolving Loan or to Continue Eurodollar Accounts in
existence under a Revolving Loan as Eurodollar Accounts under the same Revolving
Loan; provided, that: (a) the Borrower shall give the Agent notice of each such
Conversion or Continuation as provided in Section 6.3; (b) a Eurodollar Account
may only be Converted on the last day of the Interest Period therefor; and (c)
except for Conversions into Base Rate Accounts, no Conversions or Continuations
shall be made while a Default has occurred and is continuing.
Section 5.6. Computations. Interest and fees payable by the Borrower hereunder
and under the other Loan Documents shall be computed on the basis of a year of
360 days and the actual number of days elapsed (including the first day but
excluding the last day) occurring in the period for which payable unless such
calculation would result in a usurious rate, in which case interest shall be
calculated on the basis of a year of 365 or 366 days, as the case may be.
ARTICLE 6.
MULTIBANK REVOLVING LOANS
ADMINISTRATIVE MATTERS
Section 6.1. Borrowing Procedure. The Borrower shall give the Agent, and the
Agent will give the Banks, notice of each borrowing with respect to Multibank
Revolving Loans in accordance with Section 6.3. Not later than 2:00 p.m. on the
date specified for each borrowing with respect to Multibank Revolving Loans each
Bank will make available to the Agent the amount of the Multibank Revolving Loan
to be made by it on such date, at the Principal Office, in immediately available
funds, for the account of the Borrower. The amount so received by the Agent
shall, subject to the terms and conditions of this Agreement, be made available
to the Borrower by (a) depositing the same, in immediately available funds, in
an account of the Borrower (designated by the Borrower) maintained with the
Agent at the Principal Office or (b) wire transferring such funds to a Person or
Persons designated by the Borrower in writing.
Section 6.2. Minimum Amounts. Except for prepayments pursuant to Article 7, each
borrowing with respect to Multibank Revolving Loans and each prepayment of
principal of a Multibank
22
Revolving Loan shall be in an amount at least equal to Two Hundred Fifty
Thousand Dollars ($250,000) or, in each case, any larger amounts in increments
of Fifty Thousand Dollars ($50,000). Except for Conversions pursuant to Article
7, each Eurodollar Account applicable to a Multibank Revolving Loan shall be in
a minimum principal amount of Two Hundred Fifty Thousand Dollars ($250,000) or
any larger amounts in increments of Fifty Thousand Dollars ($50,000).
Section 6.3. Certain Notices. Notices by the Borrower to the Agent of
terminations or reductions of Multibank Revolving Commitments, of borrowings and
optional prepayments of Multibank Revolving Loans, and of Conversions and
Continuations of Accounts shall be irrevocable and shall be effective only if
received by the Agent not later than 12:30 p.m. (a) on the Business Day of the
borrowing, prepayment or repayment of Multibank Revolving Loans subject to Base
Rate Accounts or of the Conversion into Base Rate Accounts and (b) with respect
to any other repayments, terminations, reductions, borrowings, Conversions,
Continuations, or prepayments, on the Business Day which is the number of
Business Days prior to the day of the relevant action specified below:
Number of Business Days
Action Prior to Action
------ -----------------------
Termination or reduction of Multibank Revolving Commitments, optional 5
prepayment of Multibank Revolving Loans
Borrowing of Multibank Revolving Loans subject to Eurodollar Accounts, 3
Conversions into or Continuations as Eurodollar Accounts
Any notices of the type described in this Section 6.3 which are received by the
Agent after 12:30 p.m. on a Business Day shall be deemed to be received and
shall be effective on the next Business Day. Each such notice of termination or
reduction of the Multibank Revolving Commitments shall specify the amount of the
Multibank Revolving Commitments to be terminated or reduced. Each such notice of
borrowing, Conversion, Continuation, or prepayment shall: (a) specify the
Multibank Revolving Loans to be borrowed or prepaid or the Accounts to be
Converted or Continued; (b) the amount (subject to Section 6.2 hereof) to be
borrowed, Converted, Continued, or prepaid; (c) in the case of a Conversion, the
Type of Account to result from such Conversion; (d) in the case of a borrowing
the Type of Account or Accounts to be applicable to such borrowing and the
amounts thereof; (e) in the event a Eurodollar Account is selected, the duration
of the Interest Period therefor; and (f) the date of borrowing, Conversion,
Continuation, or prepayment (which shall be a Business Day). Each notice of
borrowing, Conversion, continuation, or prepayment shall be substantially in the
form of Exhibit "F" attached hereto. The Agent shall notify the Banks of the
contents of each such notice on the date of the Agent's receipt of the same or,
if received on or after 12:30 p.m. on a Business Day, on the next Business Day.
In the event the Borrower fails to select the Type of Account applicable to a
Multibank Revolving Loan, or the duration of any Interest Period for any
Eurodollar Account, within the time period and otherwise as provided in this
Section 6.3, such Account (if outstanding as a Eurodollar Account) will be
automatically Converted into a Base Rate Account on the last day of the
preceding Interest Period for such Account or (if outstanding as a Base Rate
Account) will remain as, or (if not then outstanding) will be made as, a Base
Rate Account.
23
The Borrower may not borrow any Multibank Revolving Loans subject to a
Eurodollar Account, Convert any Base Rate Accounts into Eurodollar Accounts, or
Continue any Eurodollar Account as a Eurodollar Account if the Applicable Rate
for such Eurodollar Accounts would exceed the Maximum Rate or if a Default
exists.
Section 6.4. Prepayments. Subject to Section 6.2 and the provisions of this
Section 6.4, the Borrower may, at any time and from time to time without premium
or penalty upon prior notice to the Agent as specified in Section 6.3, prepay or
repay any Multibank Revolving Loan in full or in part. Multibank Revolving Loans
subject to a Eurodollar Account may be prepaid or repaid only on the last day of
the Interest Period applicable thereto unless (i) the Borrower pays to the Agent
for the account of the applicable Banks any amounts due under Section 7.5 as a
result of such prepayment or repayment or (ii) after giving effect to such
prepayment or repayment the aggregate principal amount of the Eurodollar
Accounts applicable to the Multibank Revolving Loan being prepaid or repaid
having Interest Periods that end after such payment date shall be equal to or
less than the principal amount of such Multibank Revolving Loan after such
prepayment or repayment.
Section 6.5. Method of Payment. Except as otherwise expressly provided herein,
all payments of principal, interest, and other amounts to be made by the
Borrower or any Obligated Party under the Loan Documents shall be made to the
Agent at the Principal Office for the account of each Bank's Applicable Lending
Office in Dollars and in immediately available funds, without setoff, deduction,
or counterclaim, not later than 1:00 p.m. on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day). The Borrower and
each Obligated Party shall, at the time of making each such payment, specify to
the Agent the sums payable under the Loan Documents to which such payment is to
be applied (and in the event that the Borrower fails to so specify, or if an
Event of Default has occurred and is continuing, the Agent may apply such
payment and any proceeds of any Collateral to the Obligations in such order and
manner as the Required Banks may elect in their sole discretion, subject to
Section 6.6 hereof). Each payment received by the Agent under any Loan Document
for the account of a Bank shall be paid to such Bank by 3:00 p.m. on the date
the payment is deemed made to the Agent in immediately available funds, for the
account, in the case of a Bank, of such Bank's Applicable Lending Office.
Whenever any payment under any Loan Document shall be stated to be due on a day
that is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of the payment of interest and commitment fee, as the case may be.
Section 6.6. Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) each Multibank Revolving Loan shall be made by the Banks, each payment of
commitment fees under Section 2.5 shall be made for the account of the Banks,
and each termination or reduction of the Multibank Revolving Commitments shall
be applied to the Multibank Revolving Commitments of the Banks, pro rata
according to their respective Commitment Percentages; (b) the making,
Conversion, and Continuation of Accounts of a particular Type (other than
Conversions provided for by Section 7.4) shall be made pro rata among the Banks
holding Accounts of such Type according to their respective Commitment
Percentages; (c) each payment and prepayment of principal of or interest on
Multibank Revolving Loans or Reimbursement Obligations shall be made to the
Agent for the account of the Agent or the Banks holding such Multibank Revolving
Loans or participation interests in the Reimbursement Obligations, as
applicable, pro rata in
24
accordance with the respective unpaid principal amounts of such Multibank
Revolving Loans, Reimbursement Obligations or participation interests held by
such Banks; (d) proceeds of Collateral shall be shared first, by each of the
Agent and the Banks pro rata in accordance with the respective unpaid amounts of
the Obligations then due the Agent and each such Bank and the respective
aggregate amount available for drawing under all outstanding Letters of Credit
which Agent or such Bank is obligated to fund until paid in full or fully cash
collateralized and then shall be shared with any other Secured Party pro rata in
accordance with the amount of the Obligations owed to each; and (e) the Banks
(other than the Agent) shall purchase from the Agent participations in the
Letters of Credit to the extent of their respective Commitment Percentages. If
at any time payment, in whole or in part, of any amount distributed by the Agent
hereunder is rescinded or must otherwise be restored or returned by the Agent as
a preference, fraudulent conveyance, or otherwise under any bankruptcy,
insolvency, or similar law, then each Person receiving any portion of such
amount agrees, upon demand, to return the portion of such amount it has received
to the Agent.
Section 6.7. Sharing of Payments. If a Bank shall obtain payment of any
principal of or interest on any of the Obligations due to such Bank hereunder
directly (and not through the Agent) through the exercise of any right of
set-off, banker's lien, counterclaim, or similar right, or otherwise, it shall
promptly purchase from the other Banks participations in the Obligations held by
the other Banks in such amounts, and make such other adjustments from time to
time as shall be equitable to the end that all the Banks shall share the benefit
of such payment pro rata in accordance with the unpaid principal of and interest
on the Obligations then due to each of them. To such end, all of the Banks shall
make appropriate adjustments among themselves (by the resale of participations
sold or otherwise) if all or any portion of such excess payment is thereafter
rescinded or must otherwise be restored. The Borrower agrees, to the fullest
extent it may effectively do so under applicable law, that any Bank so
purchasing a participation in the Obligations held by the other Banks may
exercise all rights of set-off, banker's lien, counterclaim, or similar rights
with respect to such participation as fully as if such Bank were a direct holder
of Obligations in the amount of such participation. Nothing contained herein
shall require any Bank to exercise any such right or shall affect the right of
any Bank to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of the Borrower.
Section 6.8. Non-Receipt of Funds by the Agent. Unless the Agent shall have been
notified by a Bank or the Borrower (the "Payor") prior to the date on which such
Bank is to make payment to the Agent hereunder or the Borrower is to make a
payment to the Agent for the account of one or more of the Banks, as the case
may be (such payment being herein called the "Required Payment"), which notice
shall be effective upon receipt, that the Payor does not intend to make the
Required Payment to the Agent, the Agent may assume that the Required Payment
has been made and may, in reliance upon such assumption (but shall not be
required to), make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Agent, (a) the recipient of such payment shall, on demand, pay to the Agent the
amount made available to it together with interest thereon in respect of the
period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to the
Federal Funds Effective Rate for such period and (b) the Agent shall be entitled
to offset against any and all sums to be paid to such recipient, the amount
calculated in accordance with the foregoing clause (a).
25
Section 6.9. Withholding Taxes. All payments by the Borrower of amounts payable
under any Loan Document shall be payable without deduction for or on account of
any present or future taxes, duties, or other charges levied or imposed by the
United States of America or by the government of any jurisdiction outside the
United States of America or by any political subdivision or taxing authority of
or in any of the foregoing through withholding or deduction with respect to any
such payments (but excluding any tax imposed on or measured by the net income or
profit of a Bank pursuant to the laws of the jurisdiction in which it is
organized or in which the principal office or Applicable Lending Office of such
Bank is located or any subdivision thereof or therein). If any such taxes,
duties, or other charges are so levied or imposed, the Borrower will make
additional payments in such amounts so that every net payment of amounts payable
by it under any Loan Document, after withholding or deduction for or on account
of any such present or future taxes, duties, or other charges, will not be less
than the amount provided for herein or therein, provided that the Borrower may
withhold to the extent required by law and shall have no obligation to pay such
additional amounts to any Bank to the extent that such taxes, duties, or other
charges are levied or imposed by reason of the failure or inability of such Bank
to comply with the provisions of Section 6.10. The Borrower shall furnish
promptly to the Agent for distribution to each affected Bank, as the case may
be, official receipts evidencing any such withholding or reduction.
Section 6.10. Withholding Tax Exemption. Each Foreign Bank agrees that it will
deliver to the Borrower and the Agent two duly completed copies of the
appropriate United States Internal Revenue Service form, certifying that such
Bank is entitled to receive payments from the Borrower under any Loan Document
without deduction or withholding of any United States federal income taxes. Each
Foreign Bank which so delivers such form further undertakes to deliver to the
Borrower and the Agent two (2) additional copies of such form (or a successor
form) on or before the date such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form so delivered
by it, and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Borrower or the Agent, in each case certifying that
such Foreign Bank is entitled to receive payments from the Borrower under any
Loan Document without deduction or withholding of any United States federal
income taxes, unless an event (including without limitation any change in
treaty, law, or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Foreign Bank from duly completing and delivering any
such form with respect to it and such Foreign Bank advises the Borrower and the
Agent that it is not capable of receiving such payments without any deduction or
withholding of United States federal income tax.
Section 6.11. Participation Obligations Absolute; Failure to Fund Participation.
The obligations of a Bank to fund its participation in the Letters of Credit in
accordance with the terms hereof shall be absolute, unconditional and
irrevocable and shall be performed strictly in accordance with the terms of the
Loan Documents under all circumstances whatsoever, including without limitation,
the following circumstances: (a) any lack of validity of any Loan Document; (b)
the occurrence of any Default; (c) the existence of any claim, set-off,
counterclaim, defenses or other rights which such Bank, the Borrower, any
Obligated Party, or any other Person may have; (d) the occurrence of any event
that has or could reasonably be expected to have a Material Adverse Effect; (e)
the failure of any condition to a Revolving Loan or the issuance of a Letter of
Credit under Article 8 hereof to be satisfied; or (f) any other circumstance
whatsoever, whether or not similar to any of the foregoing; provided that, the
obligations of a Bank to fund its participation
26
in a Letters of Credit may be subject to avoidance by a Bank if such Bank proves
in a final nonappealable judgment that it was damaged and that such damage arose
directly from the Agent's willful misconduct or gross negligence in determining
whether (i) the conditions set forth in Article 8 hereof to the issuance of the
Letter of Credit in question were satisfied at the time of such issuance or (ii)
the documentation presented under the Letter of Credit in question complied with
the terms thereof. If a Bank fails to fund its participation in a Letter of
Credit as required hereby, such Bank shall, subject to the foregoing proviso,
remain obligated to pay to the Agent the amount it failed to fund on demand
together with interest thereon in respect of the period commencing on the date
such amount should have been funded until the date the amount was actually
funded to the Agent at a rate per annum equal to the Federal Funds Effective
Rate for such period and the Agent shall be entitled to offset against any and
all sums to be paid to such Bank hereunder the amount due the Agent under this
sentence.
ARTICLE 7.
YIELD PROTECTION AND ILLEGALITY
Section 7.1. Additional Costs.
(a) The Borrower shall pay directly to each Bank from time to time such amounts
as such Bank may determine to be necessary to compensate it for any reasonable
costs incurred by such Bank which such Bank determines are directly attributable
to its making or maintaining of any Revolving Loans subject to Eurodollar
Accounts hereunder or its obligation to make any of such Revolving Loans
hereunder, or any reduction in any amount receivable by such Bank hereunder in
respect of any such Revolving Loans or such obligation (such increases in costs
and reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to such Bank under this
Agreement or its Revolving Note in respect of any of such Revolving Loans (other
than franchise taxes and taxes imposed on the overall net income of such Bank or
its Applicable Lending Office for any of such Revolving Loans by the United
States of America or the jurisdiction in which such Bank has its Principal
Office or such Applicable Lending Office);
(ii) imposes or modifies any reserve (other than the Reserve Requirement),
special deposit, minimum capital, capital ratio, or similar requirement relating
to any extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Bank (including any of such Revolving Loans
or any deposits referred to in the definition of "Eurodollar Rate" in Section
1.1 hereof); or
(iii) imposes any other condition affecting this Agreement or the Revolving
Notes or any of such extensions of credit or liabilities or commitments and
which results in additional cost or expense to the Bank.
Each Bank will notify the Borrower (with a copy to the Agent) of any event
occurring after the date of this Agreement which will entitle such Bank to
compensation pursuant to this Section 7.1(a) as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, and will
designate a different Applicable Lending Office for the Revolving
27
Loans affected by such event if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the sole opinion of
such Bank, violate any law, rule, or regulation or be in any way disadvantageous
to such Bank. Each Bank will furnish the Borrower with a certificate setting
forth the basis and the amount of each request of such Bank for compensation
under this Section 7.1(a). If any Bank requests compensation from the Borrower
under this subsection Section 7.1(a), the Borrower may, by notice to such Bank
(with a copy to the Agent) suspend the obligation of such Bank to make Revolving
Loans subject to Eurodollar Accounts or Continue Eurodollar Accounts as
Eurodollar Accounts or Convert Base Rate Accounts into Eurodollar Accounts until
the Regulatory Change giving rise to such request ceases to be in effect (in
which case the provisions of Section 7.4 hereof shall be applicable with respect
to such Eurodollar Accounts).
(b) Without limiting the effect of the foregoing provisions of this Section 7.1,
in the event that, by reason of any Regulatory Change, any Bank either (i)
incurs Additional Costs based on or measured by the excess above a specified
level of the amount of a category of deposits or other liabilities of such Bank
which includes deposits by reference to which the interest rate on the Revolving
Loans subject to Eurodollar Accounts is determined as provided in this Agreement
or a category of extensions of credit or other assets of such Bank which
includes Revolving Loans subject to Eurodollar Accounts or (ii) becomes subject
to restrictions on the amount of such a category of liabilities or assets which
it may hold, then, if such Bank so elects by notice to the Borrower (with a copy
to the Agent), the obligation of such Bank to make Revolving Loans subject to
Eurodollar Accounts or Continue Eurodollar Accounts as Eurodollar Accounts or
Convert Base Rate Accounts into Eurodollar Accounts hereunder shall be suspended
until the Regulatory Change giving rise to such request ceases to be in effect
(in which case the provisions of Section 7.4 hereof shall be applicable).
(c) Determinations and allocations by any Bank for purposes of this Section 7.1
of the effect of any Regulatory Change on its costs of maintaining its
obligation to make Revolving Loans or of making or maintaining Revolving Loans
or on amounts receivable by it in respect of the Revolving Loans, and of the
additional amounts required to compensate such Bank in respect of any Additional
Costs, shall, absent manifest error, be conclusive, provided that such
determinations and allocations are made on a reasonable basis.
Section 7.2. Limitation on Eurodollar Accounts. Anything herein to the contrary
notwithstanding, if with respect to any Eurodollar Accounts under a Revolving
Loan for any Interest Period therefor:
(a) The Agent determines (which determination shall be conclusive) that
quotations of interest rates for the relevant deposits referred to in the
definition of "Eurodollar Rate" in Section 1.1 hereof are not being provided in
the relative amounts or for the relative maturities for purposes of determining
the rate of interest for the Revolving Loans subject to such Eurodollar Accounts
as provided in this Agreement; or
(b) Required Banks determine (which determination shall be conclusive) and
notify the Agent that the relevant rates of interest referred to in the
definition of "Adjusted Eurodollar Rate" in Section 1.1 hereof on the basis of
which the rate of interest for such Revolving Loans for such Interest Period is
to be determined do not accurately reflect the cost to the Banks of making or
maintaining such Revolving Loans for such Interest Period;
28
then the Agent shall give the Borrower prompt notice thereof specifying the
relevant Eurodollar Account and the relevant amounts or periods, and so long as
such condition remains in effect, the Banks shall be under no obligation to make
additional Revolving Loans subject to a Eurodollar Account or to Convert Base
Rate Accounts into Eurodollar Accounts and the Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Eurodollar
Accounts, either prepay the Revolving Loans subject to such Eurodollar Accounts
or Convert such Eurodollar Accounts into Base Rate Accounts in accordance with
the terms of this Agreement. Determinations made under this Section 7.2 shall be
made on a reasonable basis.
Section 7.3. Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Bank or its Applicable Lending
Office to (a) honor its obligation to make Revolving Loans subject to a
Eurodollar Account hereunder or (b) maintain Revolving Loans subject to a
Eurodollar Account hereunder, then such Bank shall promptly notify the Borrower
(with a copy to the Agent) thereof and such Bank's obligation to make or
maintain Revolving Loans subject to a Eurodollar Account and to Convert Base
Rate Accounts into Eurodollar Accounts hereunder shall be suspended until such
time as such Bank may again make and maintain Revolving Loans subject to a
Eurodollar Account (in which case the provisions of Section 7.4 hereof shall be
applicable).
Section 7.4. Treatment of Affected Loans. If the Accounts applicable to a
Revolving Loan of any Bank (hereinafter called "Affected Accounts") are to be
Converted pursuant to Section 7.1 or Section 7.3 hereof, the Bank's Affected
Accounts shall be automatically Converted into Base Rate Accounts on the last
day(s) of the then current Interest Period(s) (or, in the case of a Conversion
required by Section 7.1(b) or Section 7.3 hereof, on such earlier date as such
Bank may specify to the Borrower with a copy to the Agent) and, unless and until
such Bank gives notice as provided below that the circumstances specified in
Section 7.1 or Section 7.3 hereof which gave rise to such Conversion no longer
exist: (a) to the extent that such Bank's Affected Accounts have been so
Converted, all payments and prepayments of principal which would otherwise be
applied to such Bank's Affected Accounts shall be applied instead to its Base
Rate Accounts; and (b) all Accounts which would otherwise be established or
Continued by such Bank as Eurodollar Accounts shall be made as or Converted into
Base Rate Accounts and all Accounts of such Bank which would otherwise be
Converted into Eurodollar Accounts shall be Converted instead into (or shall
remain as) Base Rate Accounts. If such Bank gives notice to the Borrower (with a
copy to the Agent) that the circumstances specified in Section 7.1 or Section
7.3 hereof which gave rise to the Conversion of such Bank's Affected Accounts
pursuant to this Section 7.4 no longer exist (which such Bank agrees to do
promptly upon such circumstances ceasing to exist) at a time when Eurodollar
Accounts are outstanding, such Bank's Base Rate Accounts shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Accounts to the extent necessary so that, after
giving effect thereto, all Accounts held by the Banks holding Eurodollar
Accounts and by such Bank are held pro rata (as to principal amounts, Types, and
Interest Periods) in accordance with their respective Commitment Percentages.
Section 7.5. Compensation. The Borrower shall pay to the Agent for the account
of each Bank, upon the request of such Bank, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Bank) to compensate it for any
loss, cost, or expense incurred by it as a result of:
29
(a) Any payment or prepayment of a Revolving Loan subject to a Eurodollar
Account or Conversion of a Eurodollar Account for any reason (including, without
limitation, the acceleration of the outstanding Revolving Loans pursuant to
Section 13.2(a)) on a date other than the last day of an Interest Period for the
applicable Eurodollar Account; or
(b) Any failure by the Borrower for any reason (including, without limitation,
the failure of any conditions precedent specified in Article 8 to be satisfied)
to borrow or prepay a Revolving Loan subject to a Eurodollar Account, or Convert
a Base Rate Account to a Eurodollar Account on the date for such borrowing,
Conversion, or prepayment specified in the relevant notice of borrowing,
prepayment, or Conversion under this Agreement.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which otherwise would have accrued on the principal amount so paid or Converted
or not borrowed for the period from the date of such payment, Conversion, or
failure to borrow to the last day of the Interest Period for such Eurodollar
Account (or, in the case of a failure to borrow, the Interest Period for such
Eurodollar Account which would have commenced on the date specified for such
borrowing) at the applicable rate of interest for such Eurodollar Account
provided for herein over (ii) the interest component of the amount such Bank
would have bid in the London interbank market for Dollar deposits of leading
banks and amounts comparable to such principal amount and with maturities
comparable to such period.
Section 7.6. Capital Adequacy. If after the date hereof, any Bank shall have
determined that any Regulatory Change has or would have the effect of reducing
the rate of return on such Bank's (or its parent's) capital as a consequence of
its obligations hereunder or the transactions contemplated hereby to a level
below that which such Bank (or its parent) could have achieved but for such
adoption, implementation, change, or compliance (taking into consideration such
Bank's policies with respect to capital adequacy) by an amount deemed by such
Bank to be material, then from time to time, within ten (10) Business Days after
demand by such Bank (with a copy to the Agent), the Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank (or its
parent) for such reduction. A certificate of such Bank claiming compensation
under this Section 7.6 and setting forth the additional amount or amounts to be
paid to it hereunder shall be conclusive, provided that the determination
thereof is made on a reasonable basis. In determining such amount or amounts,
such Bank may use any reasonable averaging and attribution methods. With respect
to each demand by a Bank under this Section 7.6, no Bank shall have the right to
demand compensation for amounts attributable to any reduction in such Bank's
rate of return occurring at any time before the date which is six (6) months
prior to the date the Bank gives such demand for compensation to the Borrower.
ARTICLE 8.
CONDITIONS PRECEDENT
Section 8.1. Agreement. The effectiveness of this Agreement is subject to the
condition precedent that the Agent shall have received on or before the Closing
Date all of the following, each dated (unless otherwise indicated) the date
hereof, in form and substance satisfactory to the Agent:
30
(a) Resolutions. Resolutions of the Board of Directors of the Parent certified
by its Secretary or an Assistant Secretary, which authorize:
(i) its execution, delivery, and performance of the Loan Documents to which it
is, or is to be, a party; (ii) its execution, delivery, and performance, as the
sole managing member of Tufco LLC, of the Loan Documents to which Tufco LLC is,
or is to be, a party; and (iii) Tufco LLC's execution, delivery, and
performance, on behalf of and as the managing general partner of the Borrower,
of the Loan Documents to which the Borrower is, or is to be, a party.
(b) Incumbency Certificate. A certificate of incumbency certified by the
Secretary or an Assistant Secretary of the Parent, certifying the name of each
of such party's officers (i) who are authorized to sign the Loan Documents to
which the Parent, Tufco LLC or the Borrower is, or is to be, a party on behalf
of such party (including the certificates contemplated herein) together with
specimen signatures of each such officers and (ii) who will, until replaced by
other officers duly authorized for that purpose, act as its representative for
the purposes of signing documentation and giving notices and other
communications in connection with the Loan Documents.
(c) Formation Documents. The articles of incorporation of the Parent,
certificate of formation of Tufco LLC and the certificate of limited partnership
of the Borrower certified by the Secretary of State of Delaware and dated a
current date.
(d) Bylaws; Limited Liability Company Agreement, Partnership Agreement. The
limited liability company agreement of Tufco LLC certified by the Secretary or
an Assistant Secretary of the Parent, as sole managing member of Tufco LLC. The
bylaws of the Parent certified by the Secretary or the Assistant Secretary of
the Parent. All partnership agreements of the Borrower certified by the
Secretary or the Assistant Secretary of the Parent, as the sole managing member
of Tufco LLC, the managing general partner of the Borrower.
(e) Governmental Certificates; USA Patriot Act Information. Certificates of the
appropriate government officials of the state of incorporation or organization
of the Borrower and each Guarantor as to its existence and good standing in such
jurisdiction and copies of applications to do business as a foreign entity filed
with the appropriate government officials of each jurisdiction in which the
Borrower and each Guarantor is required to qualify to do business and where
failure to so qualify could reasonably be expected to have a Material Adverse
Effect, all dated a current date. Information required by Section 326 of the USA
Patriot Act or necessary for the Agent or any Bank to verify the identity of
Borrower as required by Section 326 of the USA Patriot Act.
(f) Revolving Notes. If required by a Bank, the Revolving Notes executed by the
Borrower.
(g) Master Guarantee. The Master Guaranty executed by each of the Guarantors.
(h) Lien Searches. Lien searches reasonably required by Bank to ensure Borrower
is in compliance with this Agreement on the Closing Date.
(i) Opinion of Counsel. Favorable opinion of legal counsel to the Parent and the
Subsidiaries, as to such matters as the Agent may request.
(j) Industrial Revenue Bond. Proof satisfactory to Agent the Borrower's existing
Industrial
31
Revenue Bond obligations have been paid in full.
(k) Fees and Expenses. Evidence that all fees and other amounts due and payable
on the Closing Date to the Agent or any Bank, including the costs and expenses
(including attorneys' fees) referred to in Section 15.1, to the extent incurred,
shall have been paid in full by the Borrower.
Section 8.2. All Extensions of Credit. The obligation of each Bank to make any
Revolving Loan, except for any Bank One Individual Revolving Loan, or the
obligation of the Agent to issue any Letter of Credit is subject to the
following additional conditions precedent:
(a) No Default. No Default shall have occurred and be continuing, or would
result from such Revolving Loan or Letter of Credit;
(b) Representations and Warranties. All of the representations and warranties
contained in Article 9 hereof and in the other Loan Documents shall be true and
correct on and as of the date of such extensions of credit with the same force
and effect as if such representations and warranties had been made on and as of
such date except to the extent that such representations and warranties relate
specifically to another date; and
Each notice of borrowing by the Borrower hereunder except for any Bank One
Individual Revolving Loan, and each request for the issuance of a Letter of
Credit, shall constitute a representation and warranty by the Borrower that the
conditions precedent set forth in Section 8.2(a) and Section 8.2(b) have been
satisfied (both as of the date of such notice and, unless the Borrower otherwise
notifies the Agent prior to the date of such borrowing, as of the date of such
borrowing or issuance of a Letter of Credit).
ARTICLE 9.
REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Banks to enter into this Agreement, the Parent and
the Borrower each represents and warrants to the Agent and the Banks that:
Section 9.1. Corporate Existence. The Borrower and each Obligated Party (a) is a
corporation or other entity (as reflected on Schedule 9.14) duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority to own
its assets and carry on its business as now being or as proposed to be
conducted, and (c) is qualified to do business in all jurisdictions in which the
nature of its business makes such qualification necessary and where the failure
to so qualify could reasonably be expected to have a Material Adverse Effect.
The Borrower and each Obligated Party has the corporate power and authority to
execute, deliver, and perform their respective obligations under the Loan
Documents to which it is or may become a party.
Section 9.2. Financial Statements. The Parent has delivered to the Agent audited
consolidated financial statements of the Parent and the Subsidiaries as of and
for the Fiscal Year ended September 30, 2003 and an unaudited consolidated
financial statement of the Parent and the Subsidiaries for the Fiscal Quarter
ending March 31, 2004. Such financial statements, have been prepared in
accordance with GAAP and present fairly, in all material respects, on a
consolidated
32
basis, the financial condition of the Parent and the Subsidiaries as of the
respective dates indicated therein and the results of operations for the
respective periods indicated therein. Neither the Borrower nor any of the
Obligated Parties has any material contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments, or unrealized or anticipated
losses from any unfavorable commitments except as referred to or reflected in
such financial statements. There has been no material adverse change in the
business, condition (financial or otherwise), operations, or properties of the
Parent and the Subsidiaries taken as a whole since the effective date of the
most recent financial statements referred to in this Section 9.2.
Section 9.3. Corporate Action; No Breach. The execution, delivery, and
performance by the Borrower and each Obligated Party of the Loan Documents to
which each is or may become a party and compliance with the terms and provisions
hereof and thereof have been duly authorized by all requisite action on the part
of the Borrower and each Obligated Party and do not and will not (a) violate or
conflict with, or result in a breach of, or require any consent under (i) the
articles of incorporation, bylaws or other governing documents of the Borrower
or any of the Obligated Parties, (ii) any applicable law, rule, or regulation or
any order, writ, injunction, or decree of any Governmental Authority or
arbitrator or (iii) any material agreement or instrument to which the Borrower
or any Obligated Party is a party or by which any of them or any of their
property is bound or subject, or (b) constitute a default under any such
agreement or instrument, or result in the creation or imposition of any Lien
(except as provided herein) upon any of the revenues or assets of the Borrower
or any Obligated Party.
Section 9.4. Operation of Business. The Borrower and each of the Obligated
Parties possess all licenses, permits, franchises, patents, copyrights,
trademarks, and tradenames, or rights thereto, necessary to conduct their
respective businesses substantially as now conducted except those that the
failure to so possess could not reasonably be expected to have a Material
Adverse Effect, and the Borrower and each of the Obligated Parties are not in
violation of any valid rights of others with respect to any of the foregoing
except violations that could not reasonably be expected to have a Material
Adverse Effect.
Section 9.5. Litigation and Judgments. As of the Closing Date, there is no
action, suit, investigation, or proceeding before or by any Governmental
Authority or arbitrator pending, or to the knowledge of the Borrower, threatened
against or affecting the Borrower or any Obligated Party, that would, if
adversely determined, have a Material Adverse Effect. As of the Closing Date,
there are no outstanding final judgments against the Borrower or any Obligated
Party for the payment of money in excess of Five Hundred Thousand Dollars
($500,000) for which a stay of execution has not been procured and is continuing
in effect.
Section 9.6. Rights in Properties; Liens. The Borrower and each Obligated Party
have good title to or valid leasehold interests in their respective properties
and assets, real and personal, including the properties, assets, and leasehold
interests reflected in the financial statements described in Section 9.2, and
none of the properties, assets, or leasehold interests of the Borrower or any
Obligated Party is subject to any Lien, except as permitted by Section 11.2.
Section 9.7. Enforceability. The Loan Documents to which the Borrower or any
Obligated Party is a party, when delivered, shall constitute the legal, valid,
and binding obligations of the Borrower or the Obligated Party, as applicable,
enforceable against the Borrower or the applicable Obligated Party in accordance
with their respective terms, except as limited by
33
bankruptcy, insolvency, or other laws of general application relating to the
enforcement of creditors' rights and general principles of equity.
Section 9.8. Approvals. All authorizations, approvals, and consents of, and all
filings or registrations with, any Governmental Authority or third party
necessary for the execution, delivery, or performance by the Borrower or any
Obligated Party of the Loan Documents, to which each is or may become a party or
for the validity or enforceability thereof have been obtained or made.
Section 9.9. Debt. The Borrower and the Obligated Parties have no Debt, except
as permitted by Section 11.1.
Section 9.10. Taxes. The Borrower and each Obligated Party have filed all
material tax returns (federal, state, and local) required to be filed, including
all income, franchise, employment, property, and sales tax returns, and have
paid all of their respective liabilities for taxes, assessments, governmental
charges, and other levies that are due and payable other than those being
contested in good faith by appropriate proceedings diligently pursued for which
adequate reserves have been established. The Borrower knows of no pending
investigation of the Borrower or any Obligated Party by any taxing authority or
of any pending but unassessed tax liability of the Borrower or any Obligated
Party.
Section 9.11. Margin Securities. Neither the Borrower nor any Obligated Party is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulations T, U, or X of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Revolving Loan will be used
to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying margin stock.
Section 9.12. ERISA. The Borrower and each Obligated Party are in compliance in
all material respects with all applicable provisions of ERISA. Neither a
Reportable Event nor a Prohibited Transaction has occurred and is continuing
with respect to any Plan. Neither the Borrower nor any ERISA Affiliate currently
or in the last six years has participated in or contributed to a Multiemployer
Plan or a defined benefit plan within the meaning of Section 3(35) of ERISA. No
notice of intent to terminate a Plan has been filed, nor has any Plan been
terminated. No circumstances exist which constitute grounds entitling the PBGC
to institute proceedings to terminate, or appoint a trustee to administer, a
Plan, nor has the PBGC instituted any such proceedings. Neither the Borrower nor
any ERISA Affiliate has completely or partially withdrawn from a Multiemployer
Plan. The Borrower and each ERISA Affiliate have met their minimum funding
requirements under ERISA with respect to all of their Plans. The present value
of all vested benefits under each Plan do not exceed the fair market value of
all Plan assets allocable to such benefits, as determined on the most recent
valuation date of the Plan and in accordance with ERISA, by an amount that will
exceed Five Hundred Thousand Dollars ($500,000).
Section 9.13. Disclosure. All factual information furnished by or on behalf of
the Borrower in writing to the Agent or any Bank (including, without limitation,
all information contained in the Loan Documents) for purposes of or in
connection with this Agreement or the other Loan Documents, and all other such
factual information hereafter furnished by or on behalf of the
34
Borrower to the Agent or any Bank, will be true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information not
misleading in any material respect at such time in light of the circumstances
under which such information was provided.
Section 9.14. Subsidiaries. As of the Closing Date, the Parent has no
Subsidiaries other than those listed on Schedule 9.14 hereto. Schedule 9.14 sets
forth the organizational type of each Subsidiary listed thereon, the
jurisdiction of incorporation or organization of each such Subsidiary, the
percentage of the Parent's or a Subsidiary's ownership of the outstanding voting
stock (or other ownership interests) of each such Subsidiary and, the
authorized, issued, and outstanding capital stock (or other equity interests) of
each such Subsidiary. All of the outstanding capital stock (or other equity
interests) of each Subsidiary listed on Schedule 9.14 has been validly issued,
is fully paid, and is nonassessable.
Section 9.15. Agreements. Neither the Borrower nor any Obligated Party is a
party to any indenture, loan, or credit agreement, or to any lease or other
agreement or instrument, or subject to any charter or corporate restriction that
could reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any Obligated Party is in default in any respect in the
performance, observance, or fulfillment of any of the obligations, covenants, or
conditions contained in any agreement or instrument to which it is a party other
than defaults which will not have a Material Adverse Effect.
Section 9.16. Compliance with Laws. Neither the Borrower nor any Obligated Party
is in violation in any material respect of any law, rule, regulation, order, or
decree of any Governmental Authority or arbitrator.
Section 9.17. Investment Company Act. Neither the Borrower nor any Obligated
Party is an "investment company" within the meaning of the Investment Company
Act of 1940, as amended.
Section 9.18. Public Utility Holding Company Act. Neither the Borrower nor any
Obligated Party is a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or a "public utility" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 9.19. Environmental Matters. Except as set forth on Schedule 9.19 or to
the extent any of the following would not have a Material Adverse Effect:
(a) The Borrower, each Obligated Party, and all of their respective properties,
assets, and operations are in material compliance with all applicable
Environmental Laws. The Borrower is not aware of, nor has the Borrower received
written notice of, any past, present, or future conditions, events, activities,
practices, or incidents which are reasonably likely to interfere with or prevent
the material compliance or continued material compliance of the Borrower and the
Obligated Parties with all Environmental Laws;
(b) The Borrower and each Obligated Party have obtained all permits, licenses,
and authorizations that are required under applicable Environmental Laws, and
all such permits are in good standing and the Borrower and the Obligated Parties
are in material compliance with all of the terms and conditions of such permits;
35
(c) No Hazardous Materials have been used, generated, stored, transported,
disposed of on, or Released from any of the properties or assets of the Borrower
or any Obligated Party by the Borrower or any Obligated Party, and to the
knowledge of the Borrower, no Hazardous Materials are present at such
properties, except in material compliance with Environmental Laws. The use which
the Borrower and the Obligated Parties make and intend to make of their
respective properties and assets will not result in the use, generation,
storage, transportation, accumulation, disposal, or Release of any Hazardous
Material on, in, or from any of their properties or assets except in compliance
with Environmental Laws;
(d) Neither the Borrower nor any of the Obligated Parties nor any of their
respective currently or previously owned or leased properties or operations is
subject to any outstanding or, to the best of its knowledge, threatened order
from or agreement with any Governmental Authority or other Person or subject to
any judicial or administrative proceeding with respect to (i) failure to comply
with Environmental Laws, (ii) Remedial Action, or (iii) any Environmental
Liabilities arising from a Release or threatened Release;
(e) Neither the Borrower nor any of the Obligated Parties owns or operates a
treatment, storage, or disposal facility requiring a permit under the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., regulations
thereunder or any comparable provision of state law. The Borrower and the
Obligated Parties are in material compliance with all applicable financial
responsibility requirements of all Environmental Laws;
(f) Neither the Borrower nor any of the Obligated Parties has filed or failed to
file any notice required under applicable Environmental Law reporting a Release;
and
(g) No Lien arising under any Environmental Law is attached to any property or
revenues of the Borrower or the Obligated Parties.
Section 9.20. Solvency. The Borrower and each Obligated Party, both individually
and on a consolidated basis: (a) owns and will own assets the fair saleable
value of which are (i) greater than the total amount of its liabilities
(including contingent liabilities) and (ii) greater than the amount that will be
required to pay probable liabilities of then existing debts as they become
absolute and matured considering all financing alternatives and potential asset
sales reasonably available to it; (b) has capital that is not unreasonably small
in relation to its business as presently conducted; and (c) does not intend to
incur and does not believe that it will incur debts beyond its ability to pay
such debts as they become due.
Section 9.21. Benefit Received. The Borrower and the Obligated Parties will
receive reasonably equivalent value in exchange for the obligations incurred
under the Loan Documents to which each is a party.
ARTICLE 10.
POSITIVE COVENANTS
The Parent and the Borrower covenant and agree that, as long as the Obligations
or any part thereof are outstanding or any Bank has any Revolving Commitment
hereunder, they will
36
perform and observe the following positive covenants:
Section 10.1. Reporting Requirements. The Borrower will furnish to the Agent:
(a) Annual Financial Statements. As soon as available, and in any event within
ninety (90) days after the end of each Fiscal Year, beginning with the Fiscal
Year ending on September 30, 2004, a copy of the following financial statements
of the Parent and the Subsidiaries on an audited, consolidated basis, and, if
requested by the Agent, on an unaudited, consolidating basis: balance sheets and
statements of income, retained earnings, and cash flow as at the end of such
Fiscal Year and for the Fiscal Year then ended, in each case setting forth in
comparative form the figures for the preceding Fiscal Year, all in reasonable
detail. Each of the audited financial statements shall be certified on an
unqualified basis by independent certified public accountants of recognized
standing acceptable to the Agent, to the effect that such report has been
prepared in accordance with GAAP;
(b) Quarterly Financial Statements. As soon as available, and in any event
within forty-five (45) days after the end of each of the first three (3) Fiscal
Quarters of each Fiscal Year, a copy of an unaudited financial report of the
Parent and the Subsidiaries as of the end of such period and for the Fiscal
Quarter then ended containing, on a consolidated basis and, if requested by the
Agent, on a consolidating basis, a balance sheet and statements of income,
retained earnings, and cash flow, in each case setting forth in comparative form
the figures for the corresponding Fiscal Quarter of the preceding Fiscal Year,
all in reasonable detail certified by a Responsible Party of the Parent to have
been prepared in accordance with GAAP and to fairly present (subject to year-end
audit adjustments) the financial condition and results of operations of the
Parent and the Subsidiaries, on a consolidated basis, at the date and for the
periods indicated therein;
(c) Compliance Certificate. With respect to the Fiscal Quarter ending on June
30, 2004 and each Fiscal Quarter thereafter, within forty-five (45) days after
the end of each Fiscal Quarter, or with respect to the last Fiscal Quarter of
each Fiscal Year, within ninety (90) days of the end of such Fiscal Quarter, a
Compliance Certificate;
(d) Annual Projections. As soon as available and in any event within forty-five
(45) days after the beginning of each Fiscal Year, the Parent will deliver its
consolidated forecasted profit and loss statement for the current Fiscal Year
set forth on a Fiscal Quarter by Fiscal Quarter basis consistent with the
Parent's historical financial statements, together with appropriate supporting
details, a statement of underlying assumption and a proforma projection of the
Parent's compliance with the financial covenants in this Agreement for the same
period;
(e) Management Letters. Promptly upon receipt thereof, a copy of any management
letter or written report submitted to the Parent or any of the Subsidiaries by
independent certified public accountants with respect to the business, condition
(financial or otherwise), operations, or properties of the Parent or any of the
Subsidiaries;
(f) Notice of Litigation. Promptly after the commencement thereof, notice of all
actions, suits, and proceedings before any Governmental Authority or arbitrator
affecting the Borrower or any Obligated Party which, if determined adversely to
the Borrower or such Obligated Party, could reasonably be expected to have a
Material Adverse Effect;
37
(g) Notice of Default. As soon as possible and in any event within five (5)
Business Days after a Responsible Party of the Borrower or a Responsible Party
of any Obligated Party has knowledge of the occurrence of each Default, a
written notice setting forth the details of such Default and the action that the
Borrower has taken and proposes to take with respect thereto;
(h) ERISA Reports. If requested by the Agent, promptly after the filing or
receipt thereof, copies of all reports, including annual reports, and notices
which the Borrower or any Obligated Party files with or receives from the PBGC
or the U.S. Department of Labor under ERISA; and as soon as possible and in any
event within five (5) Business Days after the Borrower or any Obligated Party
knows or has reason to know that any Reportable Event or Prohibited Transaction
has occurred with respect to any Plan or that the PBGC or the Borrower or any
Obligated Party has instituted or will institute proceedings under Title IV of
ERISA to terminate any Plan, a certificate of a Responsible Party of the
Borrower setting forth the details as to such Reportable Event or Prohibited
Transaction or Plan termination and the action that the Borrower proposes to
take with respect thereto. The Borrower will provide to the Agent at least
thirty (30) days prior written notice before the Borrower or any ERISA Affiliate
incurs any liability with respect to a Multiemployer Plan or becomes the sponsor
of or obligated with respect to any defined benefit plan with the meaning of
Section 3(35) of ERISA;
(i) Reports to Other Creditors. Promptly after the furnishing thereof, copies of
any statement or report furnished to any other party pursuant to the terms of
any indenture, loan, or credit or similar agreement and not otherwise required
to be furnished to the Agent and the Banks pursuant to any other clause of this
Section 10.1;
(j) Notice of Material Adverse Effect. As soon as possible and in any event
within five (5) Business Days after a Responsible Party of the Borrower or a
Responsible Party of any Obligated Party has knowledge of the occurrence
thereof, written notice of any matter that could reasonably be expected to have
a Material Adverse Effect;
(k) Proxy Statements, Etc. As soon as available, one copy of each financial
statement, report, notice or proxy statement sent by the Borrower or any
Obligated Party to its stockholders generally and one copy of each regular,
periodic, or special report, registration statement, or prospectus filed by the
Borrower or any Obligated Party with any securities exchange or the Securities
and Exchange Commission or any successor agency;
(l) General Information. Promptly, such other information concerning the
Borrower or any Obligated Party as the Agent or any Bank may from time to time
reasonably request.
Section 10.2. Maintenance of Existence; Conduct of Business. The Parent will,
and will cause each of the Subsidiaries to, preserve and maintain (i) its
existence (except as permitted by Section 11.3) and (ii) all of its privileges,
licenses, permits, franchises, qualifications, and rights that are necessary or
desirable in the ordinary conduct of its business. The Parent will, and will
cause each of the Subsidiaries to, conduct its business in an orderly and
efficient manner in accordance with good business practices.
Section 10.3. Maintenance of Properties. The Parent will, and will cause each of
the Subsidiaries to, maintain, keep, and preserve all of its material properties
necessary in the conduct of its business in good working order and condition
(exclusive of ordinary wear, tear and casualty).
38
Section 10.4. Taxes and Claims. The Parent will, and will cause each of the
Subsidiaries to, pay or discharge at or before maturity or before becoming
delinquent (a) all taxes, levies, assessments, and governmental charges imposed
on it or its income or profits or any of its property, and (b) all valid and
lawful claims for labor, material, and supplies, which, if unpaid, might become
a Lien upon any of its property; provided, however, that neither the Parent nor
any of the Subsidiaries shall be required to pay or discharge: (i) any tax,
levy, assessment, or governmental charge which is being contested in good faith
by appropriate proceedings diligently pursued, and for which adequate reserves
have been established or (ii) any taxes, levies, assessments, or governmental
charges which, in any individual case or in the aggregate, would exceed Five
Thousand Dollars ($5,000).
Section 10.5. Insurance. The Parent will, and will cause each of the
Subsidiaries to, maintain insurance with financially sound and reputable
insurance companies in such amounts and covering such risks as are usually
carried by corporations engaged in similar businesses and owning similar
properties in the same general areas in which each operates, provided that in
any event the Parent and the Borrower will maintain and cause each of the
Subsidiaries to maintain worker's compensation insurance (or alternate
comparable coverage as required by law), property insurance, comprehensive
general liability insurance and professional liability insurance reasonably
satisfactory to the Agent. Each general liability insurance policy shall name
the Agent as additional insured and shall provide that such policy will not be
canceled or materially changed without fifteen (15) days prior written notice to
the Agent.
Section 10.6. Inspection Rights. Upon prior notice and from time to time during
normal business hours, the Parent will, and will cause each of the Subsidiaries
to, permit representatives of the Agent to examine, copy, and make extracts from
its books and records, to visit and inspect its properties, and to discuss its
business, operations, and financial condition with its officers, employees, and
independent certified public accountants. When a Default exists, the prior
notice described in the first sentence of this Section 10.6 shall not be
required. The representatives of any Bank may accompany the Agent during any
examination, visit, inspection or discussions under this Section 10.6.
Section 10.7. Keeping Books and Records. The Parent will, and will cause each of
the Subsidiaries to, maintain proper books of record and account in which full,
true, and correct entries in conformity with GAAP shall be made of all dealings
and transactions in relation to its business and activities.
Section 10.8. Compliance with Laws. The Parent will, and will cause each of the
Subsidiaries to, comply in all material respects with all applicable laws
(including, without limitation, all Environmental Laws and ERISA), rules,
regulations, orders, and decrees of any Governmental Authority or arbitrator.
Section 10.9. Compliance with Agreements. The Parent will, and will cause each
of the Subsidiaries to, comply in all material respects with all agreements,
contracts, and instruments binding on it or affecting its properties or
business.
Section 10.10. Further Assurances, Subsidiary Guarantees and Environmental
Matters.
39
(a) Further Assurance. The Parent will, and will cause each of the Subsidiaries
to, execute and deliver such further documentation and take such further action
as may be requested by the Agent to carry out the provisions and purposes of the
Loan Documents.
(b) Subsidiary Guarantees. Upon the creation or acquisition of any Subsidiary,
the Parent shall cause such Subsidiary to execute and deliver a Joinder
Agreement and such other documentation as the Agent may request to cause such
Subsidiary to evidence or otherwise implement the guaranty for repayment of the
Obligations contemplated by the Master Guaranty.
(c) Environmental Reports. If the Agent at any time has reasonable basis to
believe that there may be a material violation of any Environmental Laws by, or
any material liability arising thereunder of, the Borrower, the Parent or any
Subsidiary, then the Borrower agrees, upon the written request of the Agent to
provide the Agent with such environmental reports and assessments, certificates,
engineering studies or other written material or data as the Agent may
reasonably require relating thereto. If the Agent at any time has reasonable
basis to believe that there may be a violation of any Environmental Laws by, or
any liability arising thereunder of, the Borrower, the Parent or any Subsidiary
which violation or liability is reasonably likely to have a Material Adverse
Effect, then the Borrower agrees, upon the written request of the Agent to
provide the Agent with such environmental reports and assessments, certificates,
engineering studies or other written material or data as the Agent may require
relating thereto. In the event that the Agent reasonably determines from the
environmental reports or information delivered pursuant to this clause (c) of
this Section 10.10 or pursuant to any other information, that Remedial Action is
necessary with respect to the Borrower, the Parent or any Subsidiary or its
property, the Borrower shall take such Remedial Action or other action as the
Agent may reasonably require to cure, or protect against, any material violation
or potential violation of any Environmental Laws or any material actual or
potential Environmental Liability.
Section 10.11. ERISA. The Parent will, and will cause each of the Subsidiaries
to, comply with all minimum funding requirements and all other requirements of
ERISA, if applicable, so as not to give rise to any liability which will have a
Material Adverse Effect.
ARTICLE 11.
NEGATIVE COVENANTS
The Parent covenants and agrees that, as long as the Obligations or any part
thereof are outstanding or any Bank has any Revolving Commitment hereunder, it
will perform and observe the following negative covenants:
Section 11.1. Debt. The Parent will not, and will not permit any Subsidiary to,
incur, create, assume, or permit to exist any Debt, except:
(a) Debt to the Agent, Bank One, NA and the Banks pursuant to the Loan Documents
and existing Debt described on Schedule 11.1;
(b) Intercompany Debt owed by any Subsidiary to the Parent or any other
Subsidiary; provided that (i) the obligations of each obligor of such Debt must
be subordinated in right of payment to any liability such obligor may have for
the Obligations from and after such time as any portion
40
of the Obligations shall become due and payable (whether at stated maturity, by
acceleration or otherwise) and (ii) such Debt must be incurred in the ordinary
course of business and on terms customary for intercompany borrowings or must be
made on such other terms and provisions as the Agent may reasonably require;
(c) Debt not to exceed Five Hundred Thousand Dollars ($500,000) in the aggregate
at any time outstanding secured by purchase money Liens permitted by Section
11.2;
(d) Obligations to reimburse worker's compensation insurance companies for
claims paid by such companies on the Parent's or one of the Subsidiaries' behalf
in accordance with the policies issued to the Parent and the Subsidiaries;
(e) Guaranties incurred in the ordinary course of business with respect to
surety and appeal bonds, performance and return-of-money bonds, and other
similar obligations not exceeding at any time outstanding Five Hundred Thousand
Dollars ($500,000) in aggregate liability;
(f) Debt arising in connection with any interest rate swap, cap, collar or
similar agreements entered into to enable Borrower to fix or limit its actual
interest expense; and
(g) Debts, other than the Debts specifically described in clauses (a) through
(f) of this Section 11.1, which in the aggregate do not exceed Five Hundred
Thousand Dollars ($500,000) at any time outstanding.
Section 11.2. Limitation on Liens. The Parent will not, and will not permit any
of the Subsidiaries to, incur, create, assume, or permit to exist any Lien upon
any of its property, assets, or revenues, whether now owned or hereafter
acquired, except the following:
(a) Existing Liens disclosed on Schedule 11.2 hereto and any replacement,
renewal or extension thereof that do not increase the outstanding principal
amount thereof or extend to any additional assets;
(b) Encumbrances consisting of minor easements, zoning restrictions, or other
restrictions on the use of real property that do not (individually or in the
aggregate) materially affect the value of the assets encumbered thereby or
materially impair the ability of the Parent or the Subsidiaries to use such
assets in their respective businesses, and none of which is violated in any
material respect by existing or proposed structures or land use;
(c) Liens (other than Liens relating to Environmental Liabilities or ERISA) for
taxes, assessments, or other governmental charges that are not delinquent or
which are being contested in good faith and for which adequate reserves have
been established;
(d) Liens of mechanics, materialmen, warehousemen, carriers, landlords, or other
similar statutory Liens securing obligations that are not yet due and are
incurred in the ordinary course of business or which are being contested in good
faith and for which adequate reserves have been established;
(e) Liens resulting from good faith deposits to secure payments of worker's
compensation or other social security programs or to secure the performance of
tenders, statutory obligations,
41
surety and appeal bonds, bids, and contracts (other than for payment of Debt);
(f) Liens for purchase money obligations and Capital Lease Obligations; provided
that: (i) the Debt secured by any such Lien is permitted under Section 11.1; and
(ii) any such Lien encumbers only the asset so purchased;
(g) Liens related to any attachment or judgment not constituting an Event of
Default; and
(h) Liens arising from filing UCC financing statements regarding leases not
prohibited by this Agreement.
Except as provided herein, neither the Parent nor the Borrower will, and each
will not permit any of the Subsidiaries directly or indirectly to create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such companies to:
(1) pay dividends or make any other distribution on any of such company's
capital stock (or other equity interests) owned by the Parent or any of the
Subsidiaries; (2) subject to subordination provisions, pay any Debt owed to the
Parent or any of the Subsidiaries; (3) make loans or advances to the Parent or
any of the Subsidiaries; or (4) transfer any of its property or assets to the
Parent or any of the Subsidiaries.
Section 11.3. Mergers, Etc. The Parent will not, and will not permit any of the
Subsidiaries to, become a party to a merger or consolidation; or purchase or
otherwise acquire all or a substantial part of the business or assets of any
Person or any shares or other evidence of beneficial ownership of any Person in
an aggregate amount exceeding Two Million Dollars ($2,000,000) during the entire
term of this Agreement reduced by amounts paid by the Parent for dividends and
repurchase or redemption of its capital stock pursuant to Section 11.4 of this
Agreement; or wind-up, dissolve, or liquidate itself; provided that, (a) the
Parent and the Subsidiaries may acquire assets or shares or other evidence of
beneficial ownership of a Person in accordance with the restrictions set forth
in Section 11.5; (b) if no Default exists or would result, any Subsidiary (other
than the Borrower) may merge into or consolidate with the Borrower, the Parent
or any other Subsidiary if, with respect to a merger into a Subsidiary, the
surviving Person is or becomes a wholly owned Subsidiary directly owned by the
Parent, assumes the obligations of the applicable Subsidiary under the Loan
Documents and is solvent as contemplated under Section 9.20 hereunder after
giving effect to such merger or consolidation, and (c) the Parent or any wholly
owned Subsidiary directly owned by the Parent (the "Acquiring Company") may
acquire all or substantially all of the assets of any other Subsidiary (a
"Transferring Subsidiary"), other than the Borrower, if the Acquiring Company
assumes all the Transferring Subsidiary's liabilities (including without
limitation, all liabilities of the Transferring Subsidiary under the Loan
Documents to which it is a party) and, following such assignment and assumption,
such Transferring Subsidiary may wind up, dissolve and liquidate.
Section 11.4. Restrictions on Dividends and other Distributions. The Parent will
not, and will not permit any Subsidiary to, directly or indirectly declare,
order, pay, make or set apart any sum for (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
(or other equity interest) of the Parent or any Subsidiary now or hereafter
outstanding; (b) any redemption, conversion, exchange, retirement, sinking fund
or similar payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of stock (or other equity interest) of the Parent or
any Subsidiary now or hereafter outstanding; or (c) any payment made
42
to retire, or to obtain the surrender of, any outstanding warrants, options, or
other rights to acquire shares of any class of stock (or other equity interest)
of the Parent or any Subsidiary now or hereafter outstanding; except that if no
Default exists or would result therefrom: (i) Subsidiaries may make, declare and
pay dividends and make other distributions with respect to their capital stock
(or other equity interest) for the sole purpose of enabling the Parent to pay
the actual cash taxes of the Parent attributable to the earnings of the
Subsidiaries and (ii) Parent may declare and pay dividends and repurchase or
redeem its capital stock in an aggregate amount not to exceed $2,000,000 during
the entire term of this Agreement. For the avoidance of doubt, this Section
shall not be deemed to prohibit the Borrower from making payments at any time to
pay the Parent's expenses incurred in the ordinary course of the Parent's and
the Borrower's businesses and such payments may be made to the Parent or on
behalf of the Parent.
Section 11.5. Investments. The Parent will not, and will not permit any of the
Subsidiaries to, make or permit to remain outstanding any advance, loan, other
extension of credit, or capital contribution to or investment in any Person, or
purchase or own any stock, bonds, notes, debentures, or other securities of any
Person, or be or become a joint venturer with or partner of any Person, except:
(a) readily marketable direct obligations of the United States of America or any
agency thereof with maturities of one year or less from the date of acquisition;
(b) fully insured certificates of deposit with maturities of one year or less
from the date of acquisition issued by any commercial bank operating in the
United States of America having capital and surplus in excess of Two Hundred
Fifty Million Dollars ($250,000,000);
(c) commercial paper or bonds of a domestic issuer if at the time of purchase
such paper or bonds are rated in one of the two highest rating categories of
Standard and Poor's Corporation or ▇▇▇▇▇'▇ Investors Service, Inc.;
(d) current trade and customer accounts receivable for services rendered in the
ordinary course of business;
(e) shares of any mutual fund registered under the Investment Company Act of
1940, as amended, which invests solely in investment of the type described in
clauses (a) through (c) of this Section 11.5;
(f) advances to employees for business expenses incurred in the ordinary course
of business;
(g) existing investments described on Schedule 11.5 hereto and investments in
Subsidiaries;
(h) loans, advances and other extensions of credit to Subsidiaries made in
accordance with the restrictions set forth in Section 11.1(b); provided that, at
the time any such loan, advance or other extension of credit is made, no Default
exists or would result therefrom;
(i) Guarantees permitted by Section 11.1;
(j) in addition to advances made pursuant to clause (f) above, loans to
employees provided that the aggregate outstanding amount of all loans to
employees does not exceed Two Hundred
43
Seventy Five Thousand Dollars ($275,000) at any time outstanding;
(k) shares of Parent's stock redeemed or repurchased as permitted in Section
11.4; and
(l) investments in securities in connection with an acquisition permitted in
Section 11.3.
For the avoidance of doubt, this Section shall not be deemed to prohibit the
Borrower from making payments at any time to pay the Parent's expenses incurred
in the ordinary course of the Parent's and the Borrower's businesses and such
payments may be made to the Parent or on behalf of the Parent.
Section 11.6. Limitation on Issuance of Capital Stock. The Parent will not
permit any Subsidiary to, at any time issue, sell, assign, or otherwise dispose
of (a) any of its capital stock (or other equity interests), (b) any securities
exchangeable for or convertible into or carrying any rights to acquire any of
its capital stock (or other equity interests), or (c) any option, warrant, or
other right to acquire any of its capital stock (or other equity interests);
provided, however, that the Parent or any Subsidiary may issue securities in
connection with (i) any existing employee or director stock options or existing
employee or director stock option plans or (ii) any business acquisition that is
consented to by the Required Banks.
Section 11.7. Transactions With Affiliates. The Parent will not, and will not
permit any Subsidiary to, enter into any transaction, including, without
limitation, the purchase, sale, or exchange of property or the rendering of any
service, with any Affiliate of the Parent or such Subsidiary, except: (a) in the
ordinary course of and pursuant to the reasonable requirements of the Parent's
or such Subsidiaries' business and upon fair and reasonable terms no less
favorable to the Parent or such Subsidiary than would be obtained in a
comparable arms-length transaction with a Person not an Affiliate of the Parent
or such Subsidiary; (b) management fees and indemnification payments paid under
the terms of that certain Amended and Restated Consulting Agreement dated as of
January 28, 1994, among Tufco Technologies, Inc., Tufco Industries, Inc.,
Executive Converting Corporation, Bradford Investment Partners, L.P. and
Bradford Ventures Ltd., as the same may be amended by the Parent's board of
directors; (c) fees and expenses paid to members of the Parent's Board of
Directors for their services as directors of the Parent in the ordinary course
of business; and (d) typical indemnification agreements (including those
contained in the bylaws) granted in favor of officers, directors and
shareholders protecting them from claims made in their capacities as such. For
the avoidance of doubt, this Section shall not be deemed to prohibit the
Borrower from making payments at any time to pay the Parent's expenses incurred
in the ordinary course of the Parent's and the Borrower's businesses and such
payments may be made to the Parent or on behalf of the Parent.
Section 11.8. Disposition of Assets. The Parent will not, and will not permit
any of the Subsidiaries to, sell, lease, assign, transfer, or otherwise dispose
of any of its assets, except (a) dispositions of inventory in the ordinary
course of business; (b) dispositions of unnecessary, obsolete or worn out
equipment, or other equipment that is replaced by equipment of equal or greater
value; (c) the sale, discount or transfer of delinquent notes or accounts
receivable in the ordinary course of business for purposes of collection in
accordance with past practices; and (d) if no Default exists or would result
therefrom, other dispositions of assets if the aggregate book value of the
assets disposed of does not exceed One Hundred Thousand Dollars ($100,000) in
the aggregate during any twelve (12) month period.
44
Section 11.9. Lines of Business. The Parent will not, and will not permit any of
the Subsidiaries to, engage in any line or lines of business activity other than
the businesses in which they are engaged on the Closing Date and any businesses
which are similar or related to those currently engaged in by such company.
Section 11.10. Sale and Leaseback. The Parent will not, and will not permit any
of the Subsidiaries to, enter into any arrangement with any Person pursuant to
which it leases from such Person real or personal property that has been or is
to be sold or transferred, directly or indirectly, by it to such Person.
Section 11.11. Prepayment of Debt. The Parent will not, and will not permit any
of the Subsidiaries to, prepay or optionally redeem any Debt other than the
Obligations.
ARTICLE 12.
FINANCIAL COVENANTS
The Parent covenants and agrees that, as long as the Obligations or any part
thereof are outstanding or any Bank has any Revolving Commitment hereunder, the
Parent will perform and observe the following financial covenants:
Section 12.1. Minimum Consolidated Tangible Net Worth. As of the end of each
Fiscal Quarter, the Parent shall not permit the Consolidated Tangible Net Worth
to be less than $25,000,000.00.
Section 12.2. Consolidated After Tax Net Income. The Parent shall maintain a
Consolidated After Tax Net Income of not less than zero determined as of the end
of each Fiscal Quarter for the most recently ended four Fiscal Quarters.
"Consolidated After Tax Net Income" means, for any period, the Parent's and its
Subsidiaries consolidated after tax net income (or loss) determined in
conformity with GAAP (with inventory being valued at the lower of (i) its fair
market value or (ii) its historical cost measured on a first-in, first-out
basis), but excluding to the extent included and without duplication:
(a) any extraordinary, nonrecurring or non-operating gain or revenue;
(b) any extraordinary, nonrecurring or non-operating loss or expense which is
non-cash;
(c) any gains or losses realized upon the sale or other disposition of any
capital stock or debt security of the Parent or any Subsidiary;
(d) any gains or losses from the disposal of a discontinued business;
(e) any net gains or losses arising from the extinguishment of any debt of the
Parent or any Subsidiary;
(f) any restoration to income of any contingency reserve relating to any long
term assets or long term liability, except to the extent that provision for such
reserve was made out of income
45
accrued during such period;
(g) the cumulative effect of any change in an accounting principle on income of
prior periods;
(h) any deferred credit representing the excess of equity in any acquired
company or assets at the date of acquisition over the cost of the investment in
such company or asset;
(i) the income from any sale of assets in which the book value of such assets
prior to their sale had been the book value inherited by the Parent or
Subsidiary from a transfer of such assets;
(j) the income (or loss) of any Person (other than a Subsidiary) in which the
Parent or a Subsidiary has an ownership interest; provided, however, that (i)
Consolidated After Tax Net Income shall include amounts in respect of the income
of such Person when actually received in cash by the Parent or Subsidiary in the
form of dividends or similar distributions and (ii) Consolidated After Tax Net
Income shall be reduced by the aggregate amount of all investments, regardless
of the form thereof, made by the Parent or Subsidiary in such Person for the
purpose of funding any deficit or loss of such Person;
(k) any reduction in or addition to income tax expense resulting from an
increase or decrease in a deferred income tax asset due to the anticipation of
future income tax benefits;
(l) any reduction in or addition to income tax expense due to the change in a
statutory tax rate resulting in an increase or decrease in a deferred income tax
asset or in a deferred income tax liability;
(m) any gains or losses attributable to returned surplus assets of any
pension-benefit plan or any pension credit attributable to the excess of (i) the
return on pension-plan assets over (ii) the pension obligation's service cost
and interest cost;
(n) the income or loss of any Person acquired by the Parent or a Subsidiary for
any period prior to the date of such acquisition; and
(o) the income from any sale of assets in which the accounting basis of such
assets had been the book value of any Person acquired by the Parent or a
Subsidiary prior to the date such Person became a subsidiary or was merged into
or consolidated with the Parent or such Subsidiary.
ARTICLE 13.
DEFAULT
Section 13.1. Events of Default. Each of the following shall be deemed an "Event
of Default":
(a) The Borrower shall fail to pay when due any principal, interest, fees or
other Obligations payable under any Loan Document or any part thereof.
(b) Any representation, warranty, or certification made or deemed made by the
Borrower or any Obligated Party (or any of their respective officers) in any
Loan Document or in any certificate, report, notice, or financial statement
furnished at any time in connection with any Loan
46
Document shall be false, misleading, or erroneous in any material respect when
made or deemed to have been made; provided that if (a) at the time such
representation, warranty or certification was made, each of the Borrower and
each Obligated Party reasonably believed its accuracy and (b) the circumstances
which resulted in the inaccurate or misleading representation, warranty or
certification are capable of being remedied, then an Event of Default shall not
occur herein on account thereof until twenty (20) days after the earlier of (i)
the date the Borrower or any Obligated Party became aware of the inaccurate or
misleading representation, warranty or certification or (ii) the date the Agent
or any Bank provides the Borrower with notice thereof.
(c) The Borrower or any Obligated Party shall fail to perform, observe or comply
with any covenant, agreement, or term contained in Section 10.1(g), Section
10.2(i), Section 10.6, Article 11 or Article 12 of this Agreement.
(d) The Borrower or any Obligated Party shall fail to perform, observe, or
comply with any covenant, agreement, or term contained in any Loan Document
(other than covenants to pay the Obligations and the covenants described in
Section 13.1(c)) and such failure shall continue for a period of twenty (20)
days after the earlier of (i) the date the Agent or any Bank provides the
Borrower with notice thereof or (ii) the date the Borrower has knowledge of such
failure and should have, with the exercise of reasonable diligence, notified the
Agent thereof in accordance with Section 10.1(g).
(e) The Borrower or any Obligated Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
examiner, liquidator, or the like of itself or of all or a substantial part of
its property, (ii) make a general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the United States Bankruptcy Code (as now
or hereafter in effect, the "Bankruptcy Code"), (iv) institute any proceeding or
file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution, winding-up, or
composition or readjustment of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the Bankruptcy Code, (vi) admit in writing its
inability to, or be generally unable to pay its debts as such debts become due,
or (vii) take any corporate action for the purpose of effecting any of the
foregoing.
(f) A proceeding or case shall be commenced, without the application, approval,
or consent of the Borrower or any Obligated Party, in any court of competent
jurisdiction, seeking (i) its reorganization, liquidation, dissolution,
arrangement, or winding-up, or the composition or readjustment of its debts,
(ii) the appointment of a receiver, custodian, trustee, examiner, liquidator, or
the like of the Borrower or any such Obligated Party or of all or any
substantial part of its property, or (iii) similar relief in respect of the
Borrower or any such Obligated Party under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of debts,
and such proceeding or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of thirty (30) or more days, or an order
for relief against the Borrower or any Obligated Party shall be entered in an
involuntary case under the Bankruptcy Code.
(g) The Borrower or any Obligated Party shall fail to discharge within a period
of thirty (30) days after the commencement thereof any attachment,
sequestration, forfeiture, or similar
47
proceeding or proceedings involving an aggregate amount in excess of Five
Hundred Thousand Dollars ($500,000) against any of its assets or properties.
(h) A final judgment or judgments for the payment of money in excess of Five
Hundred Thousand Dollars ($500,000) in the aggregate shall be rendered by a
court or courts against the Borrower or any Subsidiaries and the same shall not
be discharged (or provision shall not be made for such discharge), or a stay of
execution thereof shall not be procured, within thirty (30) days from the date
of entry thereof, and the Borrower or the relevant Obligated Party shall not,
within said period of thirty (30) days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal.
(i) The Borrower or any Obligated Party shall fail to pay when due any principal
of or interest on any Debt if the aggregate principal amount of the affected
Debt equals or exceeds Two Hundred Fifty Thousand Dollars ($250,000) (other than
the Obligations), or the maturity of any such Debt shall have been accelerated,
or any such Debt shall have been required to be prepaid prior to the stated
maturity thereof or any event shall have occurred with respect to any Debt in
the aggregate principal amount equal to or in excess of Two Hundred Fifty
Thousand Dollars ($250,000) that permits (or, with the giving of notice or lapse
of time or both, would permit) any holder or holders of such Debt or any Person
acting on behalf of such holder or holders to accelerate the maturity thereof or
require any such prepayment.
(j) This Agreement shall cease to be in full force and effect or shall be
declared null and void or the validity or enforceability thereof shall be
contested or challenged by the Borrower or any Obligated Party or the Borrower
or any Obligated Party shall deny that it has any further liability or
obligation under any of the Loan Documents.
(k) Any of the following events shall occur or exist with respect to the
Borrower or any ERISA Affiliate: (i) any Prohibited Transaction involving any
Plan or Multiemployer Plan; (ii) any Reportable Event with respect to any Plan;
(iii) the filing under Section 4041 of ERISA of a notice of intent to terminate
any Plan or the termination of any Plan; (iv) any event or circumstance that
might constitute grounds entitling the PBGC to institute proceedings under
Section 4042 of ERISA for the termination of, or for the appointment of a
trustee to administer, any Plan, or the institution by the PBGC of any such
proceedings; or (v) complete or partial withdrawal under Section 4201 or 4204 of
ERISA from a Multiemployer Plan or the reorganization, insolvency, or
termination of any Multiemployer Plan; and in each case above, such event or
condition, together with all other events or conditions, if any, have subjected
or could reasonably be expected to subject the Borrower to any tax, penalty, or
other liability to a Plan, a Multiemployer Plan, the PBGC, or otherwise (or any
combination thereof) which in the aggregate exceed or could reasonably be
expected to exceed Five Hundred Thousand Dollars ($500,000).
Section 13.2. Remedies. If any Event of Default shall occur and be continuing,
the Agent shall, if directed by Required Banks, do any one or more of the
following:
(a) Acceleration. By notice to the Borrower, declare all outstanding principal
of and accrued and unpaid interest on the Revolving Notes and all other amounts
payable by the Borrower under the Loan Documents immediately due and payable,
and the same shall thereupon become
48
immediately due and payable, without further notice, demand, presentment, notice
of dishonor, notice of acceleration, notice of intent to accelerate, protest, or
other formalities of any kind, all of which are hereby expressly waived by the
Borrower.
(b) Termination of Commitments. Terminate the Revolving Commitments without
notice to the Borrower (however substantially contemporaneously with the
termination of the Revolving Commitments, the Agent agrees to promptly notify
the Borrower that the Revolving Commitments have been terminated, provided, that
the failure to give such notice shall not affect the validity of such
termination).
(c) Judgment. Reduce any claim to judgment from a court of law.
(d) Rights. Exercise any and all rights and remedies afforded by the laws of the
State of Wisconsin or any other jurisdiction, by any of the Loan Documents,) by
equity, or otherwise.
Provided, however, that upon the occurrence of an Event of Default under Section
13.1(e) or Section 13.1(f), the Revolving Commitments of all of the Banks shall
automatically terminate, and the outstanding principal of and accrued and unpaid
interest on the Revolving Notes and all other amounts payable by the Borrower
under the Loan Documents shall thereupon become immediately due and payable
without notice, demand, presentment, notice of dishonor, notice of acceleration,
notice of intent to accelerate, protest, or other formalities of any kind, all
of which are hereby expressly waived by the Borrower.
Section 13.3. Performance by the Agent. If the Borrower or any Obligated Party
shall fail to perform any covenant or agreement in accordance with the terms of
the Loan Documents, the Agent may, at the direction of Required Banks, perform
or attempt to perform such covenant or agreement on behalf of the Borrower or
the applicable Obligated Party. In such event, the Borrower shall, at the
request of the Agent, promptly pay any amount reasonably expended by the Agent
or the Banks in connection with such performance or attempted performance to the
Agent at the Principal Office, together with interest thereon at the applicable
Default Rate from and including the date of such expenditure to but excluding
the date such expenditure is paid in full. Notwithstanding the foregoing, it is
expressly agreed that neither the Agent nor any Bank shall have any liability or
responsibility for the performance of any obligation of the Borrower or any
Obligated Party under any Loan Document.
Section 13.4. Setoff. If an Event of Default shall have occurred and be
continuing, each Bank is hereby authorized at any time and from time to time,
without notice to the Borrower or any Obligated Party (any such notice being
hereby expressly waived by the Borrower and each Obligated Party), to set off
and apply any and all deposits (general, time, demand, provisional, or final) at
any time held and other indebtedness at any time owing by such Bank to or for
the credit or the account of the Borrower or any Obligated Party against any and
all of the Obligations, irrespective of whether or not the Agent or such Bank
shall have made any demand under such Loan Documents and although such
Obligations may be unmatured. Each Bank agrees promptly to notify the Borrower
(with a copy to the Agent) after any such setoff and application; provided, that
the failure to give such notice shall not affect the validity of such setoff and
application. The rights and remedies of each Bank hereunder are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which such Bank may have.
49
Section 13.5. Continuance of Default. For purposes of all Loan Documents, a
Default shall be deemed to have continued and exist until the Agent shall have
actually received evidence satisfactory to the Agent that such Default shall
have been remedied.
Section 13.6. Cash Collateral. If an Event of Default shall have occurred and be
continuing, the Borrower shall, if requested by the Agent or Required Banks,
pledge to the Agent as security for the Obligations an amount in immediately
available funds equal to the then outstanding Commercial and Standby L/C
Liabilities, such funds to be held in a cash collateral account at the Agent
without any right of withdrawal by the Borrower until the outstanding Letters of
Credit are drawn on or cancelled or back-up letter of credit is/are provided.
ARTICLE 14.
THE AGENT
Section 14.1. Appointment, Powers and Immunities. Each Bank hereby appoints and
authorizes Bank One, NA to act as its agent hereunder and under the other Loan
Documents with such powers as are specifically delegated to the Agent by the
terms of the Loan Documents, together with such other powers as are reasonably
incidental thereto. Neither the Agent nor any of its Affiliates, officers,
directors, employees, attorneys, or agents shall be liable for any action taken
or omitted to be taken by any of them hereunder or otherwise in connection with
any Loan Document or any of the other Loan Documents except for its or their own
gross negligence or willful misconduct. Without limiting the generality of the
preceding sentence, the Agent: (i) may treat the payee of any Note as the holder
thereof until it receives written notice of the assignment or transfer thereof
signed by such payee and in form satisfactory to the Agent; (ii) shall have no
duties or responsibilities except those expressly set forth in the Loan
Documents, and shall not by reason of any Loan Document be a trustee or
fiduciary for any Bank; (iii) shall not be required to initiate any litigation
or collection proceedings under any Loan Document except to the extent requested
by Required Banks; (iv) shall not be responsible to the Banks for any recitals,
statements, representations, or warranties contained in any Loan Document, or
any certificate or other documentation referred to or provided for in, or
received by any of them under, any Loan Document, or for the value, validity,
effectiveness, enforceability, or sufficiency of any Loan Document or any other
documentation referred to or provided for therein or for any failure by any
Person to perform any of its obligations thereunder; (v) may consult with legal
counsel, independent public accountants, and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants, or experts; and
(vi) shall incur no liability under or in respect of any Loan Document by acting
upon any notice, consent, certificate, or other instrument or writing believed
by it to be genuine and signed or sent by the proper party or parties. As to any
matters not expressly provided for by any Loan Document, the Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by Required Banks, and such instructions of
Required Banks and any action taken or failure to act pursuant thereto shall be
binding on all of the Banks; provided, however, that the Agent shall not be
required to take any action which exposes it to personal liability or which is
contrary to any Loan Document or applicable law.
Section 14.2. Rights of Agent as a Bank. With respect to its Revolving
Commitment, the Revolving Loans made by it and any Revolving Notes issued to it,
Bank One, NA (and any
50
successor acting as the Agent) in its capacity as a Bank hereunder shall have
the same rights and powers hereunder as any other Bank and may exercise the same
as though it were not acting as the Agent, and the term "Bank" or "Banks" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent and its Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, provide merchant banking services to, and
generally engage in any kind of banking, trust, or other business with the
Borrower or any Obligated Party, and any other Person who may do business with
or own securities of the Borrower or any Obligated Party, all as if it were not
acting as the Agent and without any duty to account therefor to the Banks.
Section 14.3. Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default (other than the non-payment of principal
of or interest on the Revolving Loans or of commitment fees) unless the Agent
has received notice from a Bank or the Borrower specifying such Default and
stating that such notice is a "Notice of Default." In the event that the Agent
receives such a notice of the occurrence of a Default, the Agent shall give
prompt notice thereof to the Banks (and shall give each Bank prompt notice of
each such non-payment). The Agent shall (subject to Section 14.1) take such
action with respect to such Default as shall be directed by Required Banks,
provided that unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable and
in the best interest of the Banks.
Section 14.4. Indemnification. THE BANKS HEREBY AGREE TO INDEMNIFY THE AGENT
FROM AND HOLD THE AGENT HARMLESS AGAINST (TO THE EXTENT NOT REIMBURSED UNDER
SECTION 15.1 AND SECTION 15.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE
BORROWER UNDER SECTION 15.1 AND SECTION 15.2), RATABLY IN ACCORDANCE WITH THEIR
RESPECTIVE COMMITMENT PERCENTAGES, ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES
(INCLUDING ATTORNEYS' FEES AND EXPENSES), AND DISBURSEMENTS OF ANY KIND OR
NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE
AGENT IN ANY WAY RELATING TO OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY
ACTION TAKEN OR OMITTED TO BE TAKEN BY THE AGENT UNDER OR IN RESPECT OF THE LOAN
DOCUMENTS; PROVIDED, THAT NO BANK SHALL BE LIABLE FOR ANY PORTION OF THE
FOREGOING TO THE EXTENT CAUSED BY THE AGENT'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, IT IS THE EXPRESS INTENTION OF
THE BANKS THAT THE AGENT SHALL BE INDEMNIFIED HEREUNDER FROM AND HELD HARMLESS
AGAINST ALL OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS'
FEES AND EXPENSES), AND DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE
OF THE AGENT. WITHOUT LIMITING ANY OTHER PROVISION OF THIS SECTION 14.4, EACH
BANK AGREES TO REIMBURSE THE AGENT PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE
(CALCULATED ON THE BASIS OF THE COMMITMENTS PERCENTAGES) OF ANY AND ALL
OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEYS' FEES AND EXPENSES) INCURRED
51
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 THE LOAN DOCUMENTS, TO THE EXTENT THAT THE
AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY THE BORROWER.
Section 14.5. Independent Credit Decisions. Each Bank agrees that it has
independently and without reliance on the Agent or any other Bank, and based on
such documentation and information as it has deemed appropriate, made its own
credit analysis of the Borrower and decision to enter into any Loan Document and
that it will, independently and without reliance upon the Agent or any other
Bank, and based upon such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under any Loan Document. Except as otherwise specifically set
forth herein, the Agent shall not be required to keep itself informed as to the
performance or observance by the Borrower or any Obligated Party of any Loan
Document or to inspect the properties or books of the Borrower or any Obligated
Party. Except for notices, reports, and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder or under
the other Loan Documents, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other financial information concerning the
affairs, financial condition, or business of the Borrower or any Obligated Party
(or any of their Affiliates) which may come into the possession of the Agent or
any of its Affiliates.
Section 14.6. Several Commitments. The Revolving Commitments and other
obligations of the Banks under any Loan Document are several. The default by any
Bank in making a Revolving Loan in accordance with its Revolving Commitment
shall not relieve the other Banks of their obligations under any Loan Document.
In the event of any default by any Bank in making any Revolving Loan, each
nondefaulting bank shall be obligated to make its Revolving Loan but shall not
be obligated to advance the amount which the defaulting Bank was required to
advance hereunder. No Bank shall be responsible for any act or omission of any
other Bank.
Section 14.7. Successor Agent. Subject to the appointment and acceptance of a
successor Agent as provided below, the Agent may resign at any time by giving
thirty (30) days notice thereof to the Banks and the Borrower, and the Agent may
be removed at any time by Required Banks if it has breached its obligations
under the Loan Documents. Upon any such resignation or removal, Required Banks
will have the right to appoint a successor Agent with the Borrower's consent,
which shall not be unreasonably withheld. If no successor Agent shall have been
so appointed by Required Banks and shall have accepted such appointment within
thirty (30) days after the retiring Agent's giving of notice of resignation or
the Required Banks' removal of the retiring Agent, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent, which shall be a commercial
bank organized under the laws of the United States of America or any State
thereof and having combined capital and surplus of at least One Hundred Million
Dollars ($100,000,000). Upon the acceptance of its appointment as successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all rights, powers, privileges, immunities, contractual obligations, and duties
of the resigning or removed Agent, and the resigning or removed Agent shall be
discharged from its duties and obligations under the Loan Documents. After any
Agent's resignation or removal as Agent, the provisions of this Article 14 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it
52
while it was the Agent.
ARTICLE 15.
MISCELLANEOUS
Section 15.1. Expenses. The Borrower hereby agrees to pay after presentation of
invoices with sufficient detail:
(a) all reasonable costs and expenses of the Agent and the Arranger arising in
connection with the preparation, negotiation, execution, delivery, syndication,
distribution and review of the Loan Documents and all amendments or other
modifications to the Loan Documents, including, without limitation, the
reasonable fees and expenses of legal counsel for the Agent, the Arranger and
the Banks in an amount not to exceed $15,000.00; (b) all costs and expenses of
the Agent, the Arranger and the Banks in connection with any Default and the
enforcement of any Loan Document, including, without limitation, the fees and
expenses of legal counsel for the Agent, the Arranger and each of the Banks
(including the allocated costs of in house counsel); (c) all transfer, stamp,
documentary, or other similar taxes, assessments, or charges levied by any
Governmental Authority in respect of any Loan Document; and (d) all other
reasonable costs and expenses incurred by the Agent and the Arranger in
connection with any Loan Document, including, without limitation, all costs,
expenses, and other charges incurred in connection with obtaining any lien
search in respect of any assets of the Borrower or any Subsidiary, but not any
audit, appraisal or environmental assessment expenses.
Section 15.2. Indemnification. THE BORROWER SHALL INDEMNIFY THE AGENT, THE
ARRANGER AND EACH BANK AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLD EACH OF THEM HARMLESS
AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES AND
EXPENSES) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY
ARISE FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE,
ADMINISTRATION, OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE
TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, (C) ANY BREACH BY THE BORROWER
OR ANY OBLIGATED PARTY OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER
AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE PRESENCE, RELEASE,
THREATENED RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL
LOCATED ON, ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF THE
BORROWER OR ANY SUBSIDIARY, OR (E) ANY INVESTIGATION, LITIGATION, OR OTHER
PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING; PROVIDED THAT
THE PERSON ENTITLED TO BE INDEMNIFIED UNDER THIS SECTION 15.2 SHALL NOT BE
INDEMNIFIED FROM OR HELD HARMLESS AGAINST ANY LOSSES, LIABILITIES, CLAIMS,
DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, OR EXPENSES ARISING OUT OF
OR RESULTING FROM ITS GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR BREACH OF ITS
OBLIGATIONS UNDER THE LOAN DOCUMENTS. WITHOUT LIMITING ANY
53
PROVISION OF ANY LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES
HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION SHALL BE
INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES,
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES
(INCLUDING REASONABLE ATTORNEYS' FEES AND EXPENSES) ARISING OUT OF OR RESULTING
FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON.
Section 15.3. Limitation of Liability. None of the Agent, the Arranger, any
Bank, or any Affiliate, officer, director, employee, attorney, or agent thereof
shall have any liability with respect to, and the Borrower and, by the execution
of the Loan Documents to which it is a party, each Obligated Party, hereby
waives, releases, and agrees not to ▇▇▇ any of them upon, any claim for any
special, indirect, incidental, exemplary, consequential, or punitive damages
suffered or incurred by the Borrower or any Obligated Party in connection with,
arising out of, or in any way related to any of the Loan Documents, or any of
the transactions contemplated by any of the Loan Documents.
The Borrower agrees to pay to the Agent and the Arranger, for their
respective accounts, the fees agreed to by the Borrower, the Agent and the
Arranger pursuant to that certain letter agreement dated May 13, 2004, or as
otherwise agreed from time to time.
Section 15.4. No Duty. All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by the Agent, the Arranger or any
Bank shall have the right to act exclusively in the interest of the Agent, the
Arranger and the Banks and shall have no duty of disclosure, duty of loyalty,
duty of care, or other duty or obligation of any type or nature whatsoever to
the Borrower or any of the Borrower's shareholders or any other Person.
Section 15.5. No Fiduciary Relationship. The relationship between the Borrower
and the Obligated Parties on the one hand and the Agent and each Bank on the
other is solely that of debtor and creditor, and neither the Agent , the
Arranger nor any Bank has any fiduciary or other special relationship with the
Borrower or any Obligated Parties, and no term or condition of any of the Loan
Documents shall be construed so as to deem the relationship between the Borrower
and the Obligated Parties on the one hand and the Agent, the Arranger and each
Bank on the other and any Bank to be other than that of debtor and creditor.
Section 15.6. Equitable Relief. The Borrower recognizes that in the event the
Borrower or any Obligated Party fails to pay, perform, observe, or discharge any
or all of the obligations under the Loan Documents, any remedy at law may prove
to be inadequate relief to the Agent, the Arranger and the Banks. The Borrower
therefore agrees that the Agent, the Arranger and the Banks, if the Agent, the
Arranger or the Required Banks so request, shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages.
Section 15.7. No Waiver; Cumulative Remedies. No failure on the part of the
Agent, the Arranger or any Bank to exercise and no delay in exercising, and no
course of dealing with respect to, any right, power or privilege under any Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right,
54
power, or privilege. The rights and remedies provided for in the Loan Documents
are cumulative and not exclusive of any rights and remedies provided by law.
Section 15.8. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that (i) neither the Borrower nor the Parent may assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Bank (and any attempted assignment or transfer by
the Borrower or the Parent without such consent shall be null and void) and (ii)
no Bank may assign or otherwise transfer its rights or obligations hereunder
except in accordance with this Section 15.8. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants (to the extent provided in this Section 15.8(c)) and, to the extent
expressly contemplated hereby, the Related Parties of each of the Agent and the
Banks, any legal or equitable right, remedy or claim under or by reason of this
Agreement.
(b) (i) Subject to the conditions set forth in Section 15.8(b)(ii), any Bank
(the "Assigning Bank") may assign to one or more Persons (each an "Assignee")
all or a portion of its rights and obligations under this Agreement and the
other Loan Documents (including all or a portion of its Revolving Commitment and
the Revolving Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of:
(A) the Borrower, provided that no consent of the Borrower shall be required for
an assignment to a Bank, an Affiliate of a Bank, an Approved Fund (as defined
below) or, if an Event of Default under Section 13.1(a), Section 13.1(e), or
Section 13.1(f) has occurred and is continuing, any other Assignee; and
(B) the Agent, provided that no consent of the Agent shall be required for an
assignment of a Revolving Commitment to an Assignee that is a Bank with a
Revolving Commitment immediately prior to giving effect to such assignment.
(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Bank or an Affiliate of a Bank or
an assignment of the entire remaining amount of the Assigning Bank's Revolving
Commitment or Revolving Loans, the amount of the Revolving Commitment or
Revolving Loans of the Assigning Bank subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Agent) shall not be less than Two Million Dollars
($2,000,000) unless each of the Borrower and the Agent otherwise consent,
provided that no such consent of the Borrower shall be required if an Event of
Default under Section 13.1(a), Section 13.1(e), or Section 13.1(f) has occurred
and is continuing;
(B) each partial assignment shall be made as an assignment of a proportionate
part of all the Assigning Bank's rights and obligations under this Agreement;
(C) the parties to each assignment shall execute and deliver to the Agent, for
its acceptance and recording in the Register (as defined below), an Assignment
and Assumption, together with the
55
Revolving Note subject to such assignment, and a processing and recordation fee
of Three Thousand Five Hundred Dollars ($3,500) payable by the Assigning Bank or
Assignee (and not the Borrower), provided, that such fee shall not be payable to
the Agent if the Assigning Bank is making an assignment to one of its
Affiliates;
(D) the Assignee, if it shall not be a Bank, shall deliver to the Agent an
Administrative Questionnaire; and
(E) in the case of an assignment to a CLO (as defined below), the Assigning Bank
shall retain the sole right to approve any amendment, modification or waiver of
any provision of this Agreement, provided that the Assignment and Assumption
between such Assigning Bank and such CLO may provide that such Assigning Bank
will not, without the consent of such CLO, agree to any amendment, modification
or waiver described in the first proviso to Section 15.11(b) that affects such
CLO.
For the purposes of this Section 15.8(b), the terms "Approved Fund" and "CLO"
have the following meanings:
"Approved Fund" means (a) a CLO and (b) with respect to any Bank that is a fund
which invests in bank loans and similar extensions of credit, any other fund
that invests in bank loans and similar extensions of credit and is managed by
the same investment advisor as such Bank or by an Affiliate of such investment
advisor.
"CLO" means any entity (whether a corporation, partnership, trust or otherwise)
that is engaged in making, purchasing, holding or otherwise investing in bank
loans and similar extensions of credit in the ordinary course of its business
and is administered or managed by a Bank or an Affiliate of such Bank.
(iii) Subject to acceptance and recording thereof pursuant to Section
15.8(b)(v), from and after the effective date specified in each Assignment and
Assumption the Assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Bank under this Agreement, and the Assigning Bank thereunder
shall, to the extent of the interest assigned by such Assignment and Assumption,
be released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the Assigning Bank's rights and
obligations under this Agreement, such Assigning Bank shall cease to be a party
hereto but shall continue to be entitled to the benefits of Section 6.9, Article
7, Section 15.1 and Section 15.2). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 15.8 shall be treated for purposes of this Agreement as a sale by such
Bank of a participation in such rights and obligations in accordance with
Section 15.8(c).
(iv) The Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Banks, and the Revolving Commitment of, and principal amount of the
Revolving Loans, each Bank pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive, and the Borrower,
the Agent, the Bank that issues any Letter of Credit and the Banks may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Bank hereunder for all
56
purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Borrower, the Bank that issues any
Letter of Credit and any Bank, at any reasonable time and from time to time upon
reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption executed by
an Assigning Bank and an Assignee, the Assignee's completed Administrative
Questionnaire (unless the assignee shall already be a Bank hereunder), the
processing and recordation fee referred to in Section 15.8(b)(ii)(C) and any
written consent to such assignment required by Section 15.8(b)(i), the Agent
shall accept such Assignment and Assumption and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
Section 15.8(b)(v).
(c) (i) Any Bank may, without the consent of the Borrower or the Agent, sell
participations in a minimum amount of $1,000,000 to one or more banks or other
entities (a "Participant") in all or a portion of such Bank's rights and
obligations under this Agreement (including all or a portion of its Revolving
Commitment and the Revolving Loans owing to it); provided that (A) such Bank's
obligations under this Agreement shall remain unchanged, (B) such Bank shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrower, the Agent and the other Banks shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under the Loan Documents. Any agreement or
instrument pursuant to which a Bank sells such a participation shall provide
that such Bank shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of the Loan
Documents; provided that such agreement or instrument may provide that such Bank
will not, without the consent of the Participant, agree to any amendment,
modification or waiver regarding any of the following actions to the extent that
it would affect the Participant: (1) any increase of such Bank's Revolving
Commitment, (2) any reduction of the principal amount of, or interest to be paid
on, the Revolving Loans or other Obligations of such Bank, (3) any reduction of
any commitment fee, or other amount payable to such Bank under any Loan
Document, (4) any postponement of any date for the payment of any amount payable
in respect of the Revolving Loans or other Obligations of such Bank, or (5) the
release of Borrower or any Obligated Party. Subject to Section 15.8(c)(ii), the
Borrower agrees that each Participant shall be entitled to the benefits of
Section 6.9 and Article 7 to the same extent as if it were a Bank and had
acquired its interest by assignment pursuant to Section 15.8(b). To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 13.4 as though it were a Bank, provided such Participant agrees to be
subject to Section 6.7 as though it were a Bank.
(ii) A Participant shall not be entitled to receive any greater payment under
Section 6.9 and Article 7 than the applicable Bank would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower's prior
written consent. A Participant that would be a Foreign Bank if it were a Bank
shall not be entitled to the benefits of Section 6.9 unless the Borrower is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 6.10 as though
it were a Bank.
(d) Any Bank may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Bank,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank, and this Section 15.8 shall not apply
57
to any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Bank from any of its
obligations hereunder or substitute any such pledgee or assignee for such Bank
as a party hereto.
(e) Any Bank may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 15.8, disclose to the
assignee or participant or proposed assignee or participant, any information
relating to the Parent or the Subsidiaries furnished to such Bank by or on
behalf of the Parent or the Subsidiaries.
Section 15.9. Survival. All representations and warranties made in any Loan
Document or in any document, statement, or certificate furnished in connection
with any Loan Document shall survive the execution and delivery of the Loan
Documents and no investigation by the Agent or any Bank or any closing shall
affect the representations and warranties or the right of the Agent or any Bank
to rely upon them. Without prejudice to the survival of any other obligation of
the Borrower hereunder, the obligations of the Borrower under Article 7 and
Sections 15.1 and 15.2 shall survive repayment of the Revolving Notes and
termination of the Revolving Commitments.
Section 15.10. Entire Agreement; Amendment and Restatement. THIS AGREEMENT, THE
NOTES, AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
HERETO.
Section 15.11. Waivers; Amendments.
(a) No waiver of any provision of any Loan Document or consent to any departure
by the Borrower or any Obligated Party therefrom shall in any event be effective
unless the same shall be permitted by Section 15.11(b), and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. Without limiting the generality of the foregoing, the making of a
Revolving Loan or issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Agent or any Bank may have had
notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any provision hereof
or thereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Borrower and the Required Banks or, in
the case of any other Loan Document, pursuant to an agreement or agreements in
writing entered into by the Agent and the Borrower or the Obligated Party that
are parties thereto, in each case with the consent of the Required Banks;
provided that no such agreement shall: (i) increase the Revolving Commitment of
any Bank without the written consent of such Bank; (ii) reduce the principal
amount of any Revolving Loan or reduce the rate of interest thereon, reduce the
amount of any Reimbursement Obligation or reduce any fees payable hereunder,
without the written consent of each Bank affected thereby; (iii) postpone the
scheduled date of payment of any Reimbursement Obligation, the principal amount
of any Revolving Loan, or any interest thereon, or any fees payable
58
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of the Revolving Commitment, without
the written consent of each Bank affected thereby, (iv) change Section 6.6 or
Section 6.7 in a manner that would alter the pro rata sharing of payments
required thereby, without the written consent of each Bank, (v) change any of
the provisions of this Section 15.11 or the definition of "Required Banks," or
"Obligation" (or any term defined therein) or any other provision of any Loan
Document specifying the number or percentage of Banks required to waive, amend
or modify any rights thereunder or make any determination or grant any consent
thereunder, without the written consent of each Bank, or (vi) release any
Guarantor from its Guarantee under the Master Guaranty (except as expressly
provided in the Master Guaranty), or limit its liability in respect of such
Guarantee, without the written consent of each Bank; provided further that no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Agent without the prior written consent of the Agent.
Section 15.12. Maximum Interest Rate.
(a) No interest rate specified in any Loan Document shall at any time exceed the
Maximum Rate. If at any time the interest rate (the "Contract Rate") for any
Obligation shall exceed the Maximum Rate, thereby causing the interest accruing
on such Obligation to be limited to the Maximum Rate, then any subsequent
reduction in the Contract Rate for such Obligation shall not reduce the rate of
interest on such Obligation below the Maximum Rate until the aggregate amount of
interest accrued on such Obligation equals the aggregate amount of interest
which would have accrued on such Obligation if the Contract Rate for such
Obligation had at all times been in effect.
(b) No provision of any Loan Document shall require the payment or the
collection of interest in excess of the maximum amount permitted by applicable
law. If any excess of interest in such respect is hereby provided for, or shall
be adjudicated to be so provided, in any Loan Document or otherwise in
connection with this loan transaction, the provisions of this Section shall
govern and prevail and neither the Borrower nor the sureties, guarantors,
successors, or assigns of the Borrower shall be obligated to pay the excess
amount of such interest or any other excess sum paid for the use, forbearance,
or detention of sums loaned pursuant hereto. In the event any Bank ever
receives, collects, or applies as interest any such sum, such amount which would
be in excess of the maximum amount permitted by applicable law shall be applied
as a payment and reduction of the principal of the Obligations, and, if the
principal of the Obligations has been paid in full, any remaining excess shall
forthwith be paid to the Borrower. In determining whether or not the interest
paid or payable exceeds the Maximum Rate, the Borrower and each Bank shall, to
the extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee, or premium rather than as interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the entire contemplated term of the Obligations so that interest for
the entire term does not exceed the Maximum Rate.
Section 15.13. Notices. All notices and other communications provided for in any
Loan Document to which the Borrower or any Obligated Party is a party shall be
given or made in writing and telecopied, mailed by certified mail return receipt
requested, or delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof and, if to an Obligated
Party, at the address for notices for the Borrower, or, as to any
59
party, at such other address as shall be designated by such party in a notice to
each other party given in accordance with this Section. Except as otherwise
provided in any Loan Document, all such communications shall be deemed to have
been duly given when transmitted by telecopy, subject to telephone confirmation
of receipt, or when personally delivered or, in the case of a mailed notice,
three (3) Business Days after being duly deposited in the mails, in each case
given or addressed as aforesaid; provided, however, notices to the Agent
pursuant to Section 6.3 shall not be effective until received by the Agent.
Section 15.14. Governing Law; Venue of Service of Process. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Wisconsin and the applicable laws of the United States of America. ANY ACTION OR
PROCEEDING AGAINST THE BORROWER UNDER OR IN CONNECTION WITH ANY LOAN DOCUMENT
MAY BE BROUGHT IN ANY STATE COURT LOCATED IN GREEN BAY OR MILWAUKEE, WISCONSIN
OR ANY FEDERAL COURT IN THE EASTERN DISTRICT OF WISCONSIN. THE BORROWER HEREBY
IRREVOCABLY (a) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (b)
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM. THE BORROWER AGREES THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED
OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 15.13 OF THIS
AGREEMENT. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT THE
RIGHT OF THE AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR SHALL LIMIT THE RIGHT OF THE AGENT OR ANY BANK TO BRING ANY ACTION OR
PROCEEDING AGAINST THE BORROWER OR WITH RESPECT TO ANY OF ITS PROPERTY IN COURTS
IN OTHER JURISDICTION. ANY ACTION OR PROCEEDING BY THE BORROWER AGAINST THE
AGENT OR ANY BANK SHALL BE BROUGHT ONLY IN A COURT LOCATED IN GREEN BAY, OR
MILWAUKEE, WISCONSIN.
Section 15.15. Counterparts. This Agreement may be executed in one or more
counterparts and on telecopy counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same agreement.
Section 15.16. Severability. Any provision of any Loan Document held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of any Loan Document and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 15.17. Headings. The headings, captions, and arrangements used in this
Agreement are for convenience only and shall not affect the interpretation of
this Agreement.
Section 15.18. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation. As of the Closing Date the Banks warrant and
represent to the Borrower and the Parent there is no statute or regulation in
effect which would limit or prohibit the making of the Revolving Loans
contemplated under this Agreement. In the event any such statute or regulation
would become applicable, the
60
Borrower shall have the right to remove and replace the Bank which would be
subject to any such statute or regulation. In addition, the obligation to pay
commitment fees to any Bank affected by any such statute or regulation shall
cease during the period of any such limitation or prohibition.
Section 15.19. Construction. The Borrower, each Obligated Party (by its
execution of the Loan Documents to which its is a party), the Agent, and each
Bank acknowledges that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review the Loan Documents
with its legal counsel and that the Loan Documents shall be construed as if
jointly drafted by the parties thereto.
Section 15.20. Independence of Covenants. All covenants under the Loan Documents
shall be given independent effect so that if a particular action or condition is
not permitted by any of such covenants, the fact that it would be permitted by
an exception to, or be otherwise within the limitations of, another covenant
shall not avoid the occurrence of a Default if such action is taken or such
condition exists.
Section 15.21. USA PATRIOT ACT NOTIFICATION. The following notification is
provided to Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31
U.S.C. Section 5318:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify and record
information that identifies each person or entity that opens an account,
including any deposit account, treasury management account, loan, other
extension of credit, or other financial services product. What this means for
Borrower: When Borrower opens an account, if Borrower is an individual, Agent
and the Banks will ask for Borrower's name, residential address, tax
identification number, date of birth, and other information that will allow
Agent and the Banks to identify Borrower, and, if Borrower is not an individual,
Agent and the Banks will ask for Borrower's name, tax identification number,
business address, and other information that will allow Agent and the Banks to
identify Borrower. Agent and the Banks may also ask, if Borrower is an
individual, to see Borrower's driver's license or other identifying documents,
and, if Borrower is not an individual, to see Borrower's legal organizational
documents or other identifying documents.
Section 15.22. Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF THE AGENT OR ANY BANK IN THE NEGOTIATION, ADMINISTRATION, OR
ENFORCEMENT THEREOF.
61
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
BORROWER AND PARENT:
TUFCO, L.P.
By: Tufco LLC,
its Managing General Partner
By: Tufco Technologies, Inc.,
Its Sole Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Authorized Officer for the
Managing Member
TUFCO TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Financial Officer, Vice
President and Secretary
ADDRESS FOR NOTICES TO BORROWER AND PARENT:
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to:
Dechert LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇ ▇▇▇▇▇, Esq.
Bradford Ventures, Ltd
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
62
AGENT:
Revolving Commitments: BANK ONE, NA, individually as a Bank
and as the Agent
$3,000,000 - Multibank Revolving Commitment
$1,000,000 - Bank One Individual Revolving Commitment
By: /s/ ▇▇▇▇. ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (920) 436 -2506
Facsimile: No.: (▇▇▇) ▇▇▇-▇▇▇▇
Revolving Commitment: BANK: ASSOCIATED BANK
GREEN BAY, NA
$2,500,000.00- Multibank Revolving Commitment
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Title: Vice President
---------------------------
P. O. ▇▇▇ ▇▇▇▇▇
Address: ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: No.: (▇▇▇) ▇▇▇-▇▇▇▇
Revolving Commitment: BANK: U.S. BANK, NA
$3,500,000.00- Multibank Revolving Commitment
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
Title: Vice President
Address: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
MK-WI-T5
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: No.: (▇▇▇) ▇▇▇-▇▇▇▇
63