Exhibit (1)(b)
LOAN AGREEMENT
dated as of August 15, 2000
between
BANK OF LOUISVILLE
as the Lender
and
ORIG, LLC
as the Borrower
and joined by
▇. ▇. ▇▇▇▇▇▇▇
and
▇▇▇▇▇ ▇▇▇▇▇
as the Guarantors
TABLE OF CONTENTS
SECTION I DEFINITIONS..................................................1
SECTION II REVOLVING CREDIT LOAN........................................5
2.01 Amount of Revolving Credit...................................5
2.02 Term of the Revolving Credit.................................5
2.03 Revolving Credit Loans.......................................5
2.04 The Revolving Credit Notes...................................8
2.05 Interest on Revolving Credit Loans...........................8
2.06 Minimum Principal Balance....................................9
2.07 Notation of Disbursements and Payments.......................9
2.08 Principal and Interest Payments..............................9
2.09 Mandatory Prepayments........................................9
2.10 Optional Principal Payments..................................9
2.11 Application of Payments.....................................10
2.12 Application of Principal Payments...........................10
2.13 Purposes of Loans...........................................10
2.14 Certain limitations on Revolving Credit Loan Advances.......10
SECTION III SECURITY FOR THE LOANS......................................11
3.01 Right of Offset.............................................11
3.02 Security Interest in Partnership Interests..................11
3.03 Guaranties..................................................11
SECTION IV CONDITIONS PRECEDENT........................................11
4.01 Conditions Precedent to the first Revolving Credit Loan.....11
4.02 Conditions Preceding to Subsequent Revolving Credit Loans...13
SECTION V GENERAL COVENANTS...........................................13
5.01 Insurance...................................................13
5.02 Taxes and Other Payment Obligations.........................15
5.03 Financial Statements........................................15
5.04 Financial Records...........................................16
5.05 Properties..................................................16
5.06 Existence and Good Standing.................................16
5.07 Notice Requirements.........................................17
5.08 Revolving Credit Notes and Other Borrower Documents.........17
5.09 Compliance with Law.........................................17
5.10 Liens.......................................................17
5.11 Limit on Indebtedness, Guarantees, Etc......................18
5.12 Articles of Organization and Operating Agreement............18
5.13 Mergers, Sales, Transfers and Other Dispositions of Assets..18
5.14 Loans.......................................................19
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5.15 No Change in Ownership......................................19
5.16 Payment of Distributions....................................19
5.17 ERISA Compliance............................................19
5.18 Joinder of Subsidiaries.....................................20
SECTION VI REPRESENTATIONS AND WARRANTIES..............................20
6.01 Organization and Existence..................................20
6.02 Right to Act................................................20
6.03 No Conflicts................................................21
6.04 Authorization...............................................21
6.05 Enforceable Agreements......................................21
6.06 Contingent Obligations......................................21
6.07 Litigation..................................................21
6.08 Financial Statements........................................21
6.09 Compliance with Contractual Obligations, Laws and Judgments.22
6.10 Investment Company..........................................22
6.11 Tax Returns.................................................22
6.12 No Undisclosed Liabilities or Guaranties....................22
6.13 Title to Properties.........................................22
6.14 Trademarks and Permits......................................22
6.15 No Defaults.................................................23
6.16 Employee Benefit Plans......................................23
6.17 No Material Adverse Conditions..............................23
6.18 Regulations Q and U.........................................23
6.19 Environmental Matters.......................................23
6.20 No Public Utility Holding Company...........................24
6.21 No Subsidiaries.............................................24
6.22 Disclosure..................................................24
SECTION VII EVENTS OF DEFAULT...........................................24
7.01 Failure to Pay..............................................24
7.02 No Notice Required..........................................24
7.03 Notice Required.............................................24
7.04 Falsity of Representation or Warranty.......................25
7.05 Judgments...................................................25
7.06 Adverse Financial Change....................................25
7.07 Other Obligations...........................................25
7.08 Dissolution or Termination of Existence.....................25
7.09 Solvency....................................................25
SECTION VIII REMEDIES UPON DEFAULT.......................................26
8.01 Right to Offset.............................................26
8.02 Enforcement of Rights.......................................26
8.03 Rights Under Security Instruments...........................27
8.04 Cumulative Remedies.........................................27
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SECTION IX FEES AND EXPENSES...........................................27
9.01 Transaction Expenses........................................27
9.02 Enforcement Expenses........................................27
SECTION X MISCELLANEOUS PROVISIONS....................................28
10.01 Business Days...............................................28
10.02 Term of this Agreement......................................28
10.03 No Waivers..................................................28
10.04 Course of Dealing...........................................28
10.05 Certain Waivers by the Borrower and the Guarantors..........28
10.06 Severability................................................28
10.07 Time of the Essence.........................................28
10.08 Benefit and Binding Effect..................................28
10.09 Further Assurances..........................................29
10.10 Incorporation by Reference..................................29
10.11 Entire Agreement; No Oral Modifications.....................29
10.12 Headings....................................................29
10.13 Governing Law...............................................29
10.14 Assignments.................................................29
10.15 Multiple Counterparts.......................................29
10.16 Notices.....................................................30
10.17 Survival of Covenants.......................................31
10.18. Consent to Jurisdiction.....................................31
10.20 JURY TRIAL WAIVER.........................................31-A
10.21 ACKNOWLEDGMENT............................................31-A
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LOAN AGREEMENT
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This is a Loan Agreement (this "Agreement") dated as of August 15, 2000, between
BANK OF LOUISVILLE
a Kentucky banking corporation
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Lender")
and
ORIG, LLC
a Kentucky limited liability company
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Borrower")
and joined in by
▇. ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇▇")
and
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇")
Recitals
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The Lender intends to provide to the Borrower, and the Borrower would like
to avail itself of the Revolving Credit Loan subject to the terms and conditions
of this Agreement.
NOW, THEREFORE, the parties agree as follows:
SECTION I
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Definitions
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As used in this Agreement, the following terms shall have the following
meanings and the meanings assigned to them shall be equally applicable to both
the singular and plural forms of the terms defined:
"Affiliate" shall mean any Person (a) who directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, a Person, or (b) five percent (5%) or more of the equity
interests of whom is beneficially owned or held by such Person or a subsidiary
of such Person. The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of equity interest, by contract or
otherwise.
"Borrower" shall mean ORIG, LLC, together with all existing, as well as
future Subsidiaries of ORIG, LLC.
"Borrower Documents" shall mean, collectively, this Agreement, the
Revolving Credit Notes, the Pledge Agreement, the Guaranty Agreements and any
and all other documents to be executed and/or delivered by the Borrower and/or
the Guarantors which relate to this Agreement.
"Business Day" shall mean any day other than a Saturday or Sunday or
legal holiday on which commercial banks are authorized or required to be closed
for business in the Commonwealth of Kentucky.
"Closing Date" shall mean August 15, 2000.
"Collateral" shall mean any and all of the property of the Borrower in
which the Borrower grants the Lender a security interest.
"CPA Firm" shall mean the Borrower's firm of certified public
accountants which regularly performs accounting services for the Borrower,
provided that such firm is reasonably satisfactory to the Lender in the Lender's
discretion.
"Distribution" shall mean any amount of money or other property
declared or paid, or set apart for the purpose of payment of, any distribution
on or in respect of any capital, income or other interest in the Borrower
(including, without limitation, any "membership interest" or similar interest
under any operating agreement) and/or the purchase, retirement, reacquisition or
redemption of any capital, income, membership or other interest (including,
without limitation, any "membership interest" or similar interest under any
operating agreement) and/or any distribution by way of reduction of capital.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Section references to ERISA are to ERISA as in effect
on the date of this Agreement and any subsequent provisions of ERISA amendatory
thereof, supplemental thereto or substituted therefor.
"Event of Default" shall mean any one of the occurrences which are
Events of Default under Section VII of this Agreement.
"GAAP" shall mean generally accepted accounting principles applied on a
basis consistent with prior periods.
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"Guarantors" shall mean ▇▇▇▇▇▇▇ and ▇▇▇▇▇.
"Guaranty Agreements" shall mean, collectively, (a) the Guaranty
Agreement dated as of August 15, 2000 among the Lender, the Borrower, and (b)
the Guaranty Agreement dated as of August 15, 2000, among the Lender, the
Borrower and ▇▇▇▇▇. "Guaranty Agreement" shall mean either of the Guaranty
Agreements.
"Indebtedness" shall mean all obligations, contingent or otherwise,
which, in accordance with GAAP, should be classified on the Person's balance
sheet as liabilities.
"Loan" shall mean any Revolving Credit Loan, and "Loans" shall mean all
of the Revolving Credit Loans, collectively.
"Note" shall mean any of the Revolving Credit Notes and any note or
notes delivered in renewal, replacement, substitution extension or novation of
any of them.
"NTS III" shall mean NTS-Properties III, a limited partnership
organized under the laws of the State of Georgia.
"NTS IV" shall mean NTS-Properties IV, a limited partnership organized
under the laws of the Commonwealth of Kentucky.
"NTS V" shall mean NTS-Properties V, a Maryland Limited Partnership, a
limited partnership organized under the laws of the State of Maryland.
"NTS VI" shall mean NTS-Properties VI, a Maryland Limited Partnership,
a limited partnership organized under the laws of the State of Maryland.
"NTS VII" shall mean NTS-Properties VII, Ltd., a limited partnership
organized under the laws of the State of Florida.
"NTS Plus" shall mean NTS-Properties Plus, Ltd., a limited partnership
organized under the laws of the State of Florida.
"Partnership" shall mean any of NTS III, NTS IV, NTS V, NTS VI, NTS
VII, and/or NTS Plus, and "Partnerships" shall mean all of them or any
combination of them.
"Partnership Interests" shall mean all general and/or limited
partnership interest or interests of the Borrower from time to time in any one
or more of the Partnerships to the maximum extent permitted by law, including
Florida Statutes ss. 620.102, Georgia Code ▇▇▇. ss. 14-9-101, Kentucky Revised
Statutes ss. 362.401 and Maryland Code ▇▇▇. ss. 10-101, and shall include
without limitation the right to profits, distributions, return of capital,
partner loans or advances, and all rights to vote for, consent or otherwise
approve any matter. The Partnership Interests of the Borrower on the date of
this Agreement are described on Schedule 1(P) to this Agreement. Partnership
Interests in one or more of the Partnerships acquired after the date of this
Agreement are not described on Schedule 1(P) (although they may be described in
one or
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more Supplements to Pledge Agreements), but such failure to be described on
Schedule 1(P) does not derogate from those interests in the Partnerships being
Partnership Interests.
"Partnership Notice and Assignment" shall mean a notice to a
Partnership of the pledge of a Partnership Interest or Partnership Interests,
together with the acknowledgement by the Partnership of that pledge,
satisfactory in all respects to the Lender and generally in the form of Annex E
-------
to this Agreement.
"Prime Rate" shall mean the rate of interest announced by the Lender
from time to time as its Prime Rate, as that Prime Rate may change from time to
time, provided, however, the Prime Rate is not necessarily the best or lowest
rate offered by the Lender to its customers.
"Person" shall mean any individual, partnership, limited liability
company, association, trust, corporation or other entity.
"Plan" or "Plans" means, at any time, an employee pension or benefit
plan which is covered by Title IV of ERISA and is either (a) maintained by the
Borrower, or (b) maintained pursuant to a collective bargaining agreement or
similar arrangement under which more than one employee makes contributions and
to which the Borrower is making and accruing an obligation to make contributions
or has within the preceding five plan years made contributions.
"Pledge Agreement" shall mean the Pledge Agreement dated as of August
15, 2000, between the Borrower and the Lender, satisfactory to the Lender in its
discretion, and substantially in the form attached hereto as Annex B, as it may
be amended from time to time.
"Request for Advance" shall mean a request, written or oral, in such
form and with such information as the Lender may request or require, from the
Borrower for an advance under the Revolving Credit Loan.
"Revolving Credit" shall mean the Revolving Credit made available by
the Lender to the Borrower under Section II of this Agreement.
"Revolving Credit Notes" shall mean collectively the three promissory
notes issued by the Borrower to the order of the Lender with respect to the
Revolving Credit Loan in the face principal amount of Two Million Dollars
($2,000,000.00) each (for a total of Six Million Dollars ($6,000,000.00)), and
substantially in the form of Annexes A-1 though A-3 attached hereto, and all
notes delivered in renewal, replacement, substitution, extension or novation
thereof. "Revolving Credit Note" shall mean any of the Revolving Credit Notes.
"Subsidiary" shall mean, any Person of which the Borrower, directly or
indirectly, through one or more intermediaries, owns a Majority. Without
limiting the foregoing, if a Majority of any Person is owned, directly or
indirectly, by a Subsidiary, such Person is, itself, a Subsidiary. "Majority"
shall mean more than fifty percent (50%) of (a) the voting stock or interests
(by number of votes), and/or (b) the equity in, or equity interests of, such
Person.
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"Supplement to Pledge Agreement" shall have the meaning given it in the
Pledge Agreement.
"Termination Date" shall mean August 31, 2005.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect from time to time in the Commonwealth of Kentucky.
"Unmatured Default" shall mean the happening of any material breach
under this Agreement, including but not limited to failure to pay any
installment of principal or interest of the Revolving Credit Note when due, or a
breach of the financial covenants under this Agreement, or other similar
material breach the happening of which, together with the giving of any required
notice or the passage of any required period of time, would constitute an Event
of Default.
SECTION II
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Revolving Credit Loan
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The Lender hereby establishes the Revolving Credit Loan in favor of the
Borrower as follows:
2.01 Amount of Revolving Credit. The total principal amount available
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under the Revolving Credit shall be Six Million Dollars and 00/100
($6,000,000.00).
2.02 Term of the Revolving Credit. The Revolving Credit is effective as
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of the date of this Agreement, and shall continue in effect until the
Termination Date, unless the Revolving Credit is sooner extended or terminated
as provided in this Agreement. On the Termination Date, the Revolving Credit
shall terminate and all Revolving Credit Loans shall mature and be payable in
full.
2.03 Revolving Credit Loans.
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(a) The Borrower may request and the Lender may advance
Revolving Credit Loans during the term of Revolving Credit. Unless sooner
terminated, advances under the Revolving Credit will be available until the
maturity of the Revolving Credit on the Termination Date, after which the
Borrower shall not be entitled to obtain any additional advances under the
Revolving Credit.
(b) The Lender shall have the right, at its option, in its own
discretion, to terminate the Revolving Credit upon the occurrence of any Event
of Default by giving notice to the Borrower of such termination. Any termination
of the Revolving Credit shall not release the Borrower from its obligations
under this Agreement or any of the other Borrower Documents, nor shall it
terminate this Agreement or any of the other Borrower Documents. The provisions
of this Agreement and the other Borrower Documents shall continue in full force
and effect for the entire term of this Agreement as provided in Section 10.02.
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(c) Subject to the terms and conditions of this Agreement, so
long as the Revolving Credit remains in effect and is not terminated, and no
Unmatured Default or Event of Default has occurred, the Lender agrees to make
Revolving Credit Loans as the Borrower may request from time to time in
accordance with the provisions of this Agreement generally, and this Section II
in particular, provided that after giving effect to any requested Revolving
Credit Loan, the principal balance of all Revolving Credit Loans outstanding at
any one time shall not exceed the amount of the Revolving Credit as provided in
Section 2.01. Principal borrowed under the Revolving Credit and then repaid may
be reborrowed, subject to the other terms, provisions and conditions of this
Agreement and the other Borrower Documents.
(d) The Lender is under no duty to extend the period of the
Revolving Credit beyond the Termination Date. Before, at or after the
termination of the Revolving Credit, the Lender may (at its discretion, with no
obligation to do so) extend the term of the Revolving Credit, on a basis and
with terms and conditions satisfactory to the Lender. Any such extension must be
done in a writing signed by the Lender and specifically providing for an
extension of the Revolving Credit in order to be binding. If any extension of
the period of the Revolving Credit were to occur, the Pledge Agreement, and the
other Borrower Documents would remain in effect and continue to apply to the
Revolving Credit Notes, as extended (or to renewal or replacement notes for the
Revolving Credit Notes, or their replacement), until those Revolving Credit
Notes, as extended, renewed or replaced, have been paid in full.
(e) Each Revolving Credit Loan shall be subject to the
following terms and conditions, in addition to any other terms and conditions
provided in this Agreement:
(1) Each Revolving Credit Loan shall be in connection
with the acquisition of and payment for specific Partnership Interests, and
shall be in an amount no greater than the actual, out-of-pocket costs to the
Borrower to acquire those specific Partnership Interests.
(2) Before the Borrower enters into a binding contract
to acquire Partnership Interests, it shall (A) advise the Lender of its desire
to do so; (B) provide the Lender with such information as the Lender may desire
with respect to the particular Partnership Interests to be acquired and the
price that the Borrower would pay to acquire those Partnership Interests; and
(C) refrain from entering into a binding contract to acquire those Partnership
Interests until and unless the Lender shall, in its discretion, have approved
the aggregate cost to the Borrower of acquiring those Partnership Interests.
(3) Whenever the Borrower desires to obtain an
Revolving Credit Loan, it shall deliver to the Lender a Request for Advance
either orally or in writing, unless waived by the Lender in writing, on or
before the day on which it wishes to have the advance made available, together
with such other information with respect to that advance and its purpose as the
Lender may request. Without limiting the foregoing, each Request for Advance
shall specify the amount of the advance under the Revolving Credit Loan
requested and the date on which the Borrower desires the advance to be made
available.
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(4) Together with a Request for Advance, the Borrower
shall deliver to the Lender (A) a Supplement to Pledge Agreement in such form
and such information as the Lender may require to confirm that the Partnership
Interests to be acquired with the proceeds (in whole or in part) of that
Revolving Credit Loan shall become subject to the Pledge Agreement; (B)
Partnership Notices and Assignments with respect to all of the Partnership
Interests to be acquired with the proceeds (in whole or in part) of that
Revolving Credit Loan; (C) UCC-3 Amendments to Financing Statements describing
the Partnership Interests to be acquired (in whole or in part) with proceeds
from the Revolving Credit Loan as additional collateral for the obligations
secured by the Pledge Agreement; and (D) evidence satisfactory to the Lender
that the Partnership Interests to be acquired with proceeds (in whole or in
part) of that Revolving Credit Loan are or will be (upon completion of the
acquisition) owned by the Borrower free from any interest, claim, lien, charge,
encumbrance and/or security interest of any Person other than the Lender.
Without limiting the foregoing clause (D), such evidence shall include, but not
be limited to, (I) in the case of the Borrower's acquisition of Partnership
Interests which, when aggregated with all previous acquisitions of Partnership
Interests from the same Person, directly or indirectly, have an aggregated
acquisition cost of $25,000 or greater, (a) a search or searches of such public
records in the name of the Borrower as the Lender may specify, in its
discretion, disclosing no lien, charge, interest, encumbrance and/or security
interest in favor of any Person, other than the Lender, and (b) a search or
searches of such public records in the name of the Person from whom the Borrower
acquired or would acquire the Partnership Interests as the Lender may specify,
in its discretion, disclosing no lien, charge, interest, encumbrance and/or
security interest in favor of any Person, and (II) in all cases, delivery of any
and all certificates and/or other writings evidencing and/or representing such
Partnership Interests, together with an assignment in blank in form and
substance satisfactory to the Lender and its counsel in their discretion.
(5) The Borrower shall not be entitled to obtain any
Revolving Credit Loan if any Event of Default or Unmatured Default shall exist
or would exist upon the making of the Revolving Credit Loan requested, even if
the Lender does not elect to terminate the Revolving Credit as a result of such
Event of Default or Unmatured Default.
(6) The Borrower shall not be entitled to obtain any
Revolving Credit Loan if immediately after the advance requested were made, the
aggregate of all of the Revolving Credit Loans would exceed the maximum amount
permitted under Section 2.01.
(7) All Revolving Credit Loans shall be made in strict
compliance with the terms and provisions of this Agreement unless the Lender
elects in its discretion to waive any of those terms and conditions (which the
Lender shall not be required to do). The waiver of any terms and/or conditions
with respect to any one advance shall not constitute a course of dealing or a
waiver of the same or any other terms or conditions with respect to any other
requested advance.
(8) Each request by the Borrower for a Revolving Credit
Loan shall constitute the making of the following representations and warranties
by the Borrower and the Guarantors to the Lender:
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(A) That the Borrower is then, and at
the time the advance will be made will be, entitled under this Agreement to
obtain that Revolving Credit Loan; and
(B) All of the covenants, agreements,
representations and warranties made by the Borrower and the Guarantors in this
Agreement, and in the other Borrower Documents, are true, correct and complete
in all material respects and have been complied with in all material respects as
of such date (subject to only two changes of circumstances which (x) are fully
disclosed by the Borrower to the Lender in writing, describing the changed
circumstances, and (y) do not result in any violation of any condition,
provision, promise and/or covenant of this Agreement, or otherwise result in an
Unmatured Default or an Event of Default).
2.04 The Revolving Credit Notes.
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(a) The Revolving Credit Loans shall be evidenced by and
payable in accordance with the terms of the Revolving Credit Notes and on the
terms of this Agreement. In the event of any disagreement between the terms of
the executed Revolving Credit Notes and this Agreement, the terms of the
Revolving Credit Notes shall prevail.
(b) The first Two Million Dollars ($2,000,000) of Revolving
Credit Loans shall be allocated to and evidenced by Revolving Credit Note A. The
principal balance of Revolving Credit Loans will be credited against and
evidenced by Revolving Credit Note B if, but only if, and only to the extent the
aggregate principal balance of all Revolving Credit Loans outstanding at one
time exceeds Two Million Dollars ($2,000,000), but is less than Four Million
Dollars ($4,000,000). The outstanding principal balance of Revolving Credit
Loans shall be credited against and evidenced by Revolving Credit Note C if, but
only if, and only to the extent the aggregate principal balance of all Revolving
Credit Loans outstanding at one time equals or exceeds Four Million Dollars
($4,000,000). Accordingly, the first Two Million Dollars ($2,000,000), or
portion thereof, of Revolving Credit Loans outstanding at any one time shall be
credited against and evidenced by Revolving Credit Note A; at such time as the
outstanding principal balance of the Revolving Credit Loans is greater than Two
Million Dollars ($2,000,000), but less than Four Million Dollars ($4,000,000),
Revolving Credit Loans made at such time shall be credited against and evidenced
by Revolving Credit Note B; and at such time as the outstanding principal
balance of all Revolving Credit Loans outstanding at one time equals or exceeds
Four Million Dollars ($4,000,000), Revolving Credit Loans made at such time
shall be credited against and evidenced by Revolving Credit Note C.
2.05 Interest on Revolving Credit Loans.
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(a) The principal balance of the Revolving Credit Loans
outstanding from time to time shall bear interest from the date of the Revolving
Credit Notes until all principal and interest on the Revolving Credit Loans
shall have been paid in full.
(b) The outstanding principal balance of Revolving Credit
Loans from time to time evidenced by Revolving Credit Note A shall bear interest
at an annual rate equal to one quarter percent (1/4%), plus the Prime Rate as
that Prime Rate may change from time to time.
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The outstanding principal balance of Revolving Credit Loans from time to time
evidenced by Revolving Credit Note B shall bear interest at an annual rate equal
to one-half percent (1/2%), plus the Prime Rate as that Prime Rate may change
from time to time. The outstanding principal balance of Revolving Credit Loans
from time to time evidenced by Revolving Credit Note C shall bear interest at an
annual rate equal to one percent (1%), plus the Prime Rate as that Prime Rate
may change from time to time.
(c) All interest on the Revolving Credit Loan shall be
calculated on the basis of the actual number of days elapsed over an assumed
year of three-hundred sixty days (360).
2.06 Minimum Principal Balance. If, for any reason, after the making of
--------------------------
the first Revolving Credit Loan the principal balance of the Revolving Credit
Notes is reduced below one thousand dollars ($1,000.00), then, at the option of
the Lender the Revolving Credit may be terminated by the Lender without
necessity of notice to the Borrower.
2.07 Notation of Disbursements and Payments. Disbursements of, and
-----------------------------------------
payments of principal with respect to, Revolving Credit Loans shall be evidenced
by notations by the Lender on its electronic data processing equipment, showing
the date and amount of each advance and each payment of principal. The principal
amount outstanding under the Revolving Credit Notes from time to time shall also
be recorded by the Lender on that electronic data processing equipment. The
aggregate amount of all disbursements of Revolving Credit Loans made and shown
on the Lender's electronic data processing equipment, over all of the payments
of principal made by the Borrower and recorded on the Lender's electronic data
processing equipment, shall be prima facie evidence of the outstanding principal
balance due under the Revolving Credit Notes.
2.08 Principal and Interest Payments. Commencing on September 1, 2000,
--------------------------------
and continuing on the first (1st) day of each calendar month occurring through
and including August 1, 2005, the Borrower shall pay to the Lender all accrued
and unpaid interest on the Revolving Credit Loans. On the Termination Date, the
Borrower shall pay to the Lender all of the outstanding principal balance of,
and all accrued but unpaid interest on, the Revolving Credit Loans.
2.09 Mandatory Prepayments. If the Borrower sells, transfers or
-----------------------
otherwise disposes of any of the Partnership Interests, then the Borrower shall
make a prepayment of the Revolving Credit Loans in an amount calculated in
accordance with this Section. The amount of the prepayment shall be not less
than the amount of proceeds of the Revolving Credit Loan or Loans which the
Borrower received and applied (in whole or in part) towards the acquisition of
the Partnership Interest or Partnership Interests sold, transferred, or
otherwise disposed of. Mandatory prepayments under this Section shall be applied
in accordance with Section 2.10 of this Agreement.
2.10 Optional Principal Payments. The Borrower may make optional
------------------------------
prepayments of principal of the Revolving Credit Loan from time to time. Each
prepayment shall be accompanied by written statement that it is in prepayment of
the Revolving Credit Loan.
-9-
2.11 Application of Payments. The Lender shall apply all payments of
-------------------------
Revolving Credit Loans received when no Event of Default has occurred and is
continuing first to any late fees or other charges, then to accrued but unpaid
interest, and then to principal. The Lender may apply all payments of Revolving
Credit Loans received after an Event of Default has occurred and is continuing
among late fees and other charges, interest and principal as the Lender may
determine, in its discretion.
2.12 Application of Principal Payments. Unless otherwise agreed by the
----------------------------------
Lender and the Borrower in writing, all payments of principal, whether mandatory
or optional, received by the Lender when no Event of Default has occurred and is
continuing shall be applied first to the principal of Revolving Credit Loans
evidenced by Revolving Credit Note C until all of the Revolving Credit Loans
evidenced thereby shall have been paid in full, then to the principal of
Revolving Credit Loans evidenced by Revolving Credit Note B, until all of the
Revolving Credit Loans evidenced thereby shall have been paid in full, then to
the principal of Revolving Credit Loans evidenced by Revolving Credit Note A.
All payments of principal on Revolving Credit Loans, whether mandatory or
optional, received by the Lender after an Event of Default has occurred and is
continuing may be applied by the Lender among Revolving Credit Notes A, B and C
as the Lender may determine, in its discretion.
2.13 Purposes of Loans. The Borrower shall use the proceeds of all Loan
------------------
solely to acquire Partnership Interests, provided, that, the Borrower may not
apply any proceeds from any Revolving Credit Loan to the purchase of any
Partnership Interests unless the Borrower shall first have advised the Lender of
the specific Partnership Interests that the Borrower intends to acquire with the
proceeds of that Revolving Credit Loan, and the Lender shall, in its discretion,
have approved the purchase price of those Partnership Interests.
2.14 Certain limitations on Revolving Credit Loan Advances.
------------------------------------------------------
Without limiting Section 2.13,
(a) the Borrower may not use any proceeds of any Revolving
Credit Loan to acquire any Partnership Interest or Partnership Interests from
(1) any Affiliate of the Borrower, (2) either Guarantor, and/or (3) any member
of the family of either of the Guarantors (for purposes of this provision,
"family" means (A) mother or father of the subject Person, (B) any brother or
sister (or brother-in-law or sister-in-law) of such mother or father, (C) any
son or daughter (or son-in-law or daughter-in-law) of any such brother or sister
of such mother or father, and (D) any son or daughter (or son-in-law or
daughter-in-law) and/or grandson or granddaughter (and/or grandson-in-law or
granddaughter-in-law) of such Person).
(b) the Borrower shall not use the proceeds of any Revolving
Credit Loan to pay any interest that has accrued on the Revolving Credit Loans.
-10-
SECTION III
-----------
Security for the Loans
----------------------
The Revolving Credit Notes and the Revolving Credit Loans evidenced
thereby, as well as all of the Borrower's obligations under all of the Borrower
Documents are and shall be secured by and entitled to the benefits of all of the
following:
3.01 Right of Offset. The right of offset provided in Section VIII
----------------
of this Agreement.
3.02 Security Interest in Partnership Interests. A first priority
-------------------------------------------
perfected security interest in the Partnership Interests pursuant to the Pledge
Agreement.
3.03 Guaranties. The guaranties of the Guarantors pursuant to the
-----------
Guaranty Agreements.
SECTION IV
----------
Conditions Precedent
--------------------
4.01 Conditions Precedent to the first Revolving Credit Loan. The
------------------------------------------------------------
Lender's obligation to provide the Borrower with the Revolving Credit and the
first Revolving Credit Loan shall be conditioned upon the fulfillment of all the
following conditions in form and substance, and in appropriate cases through
documents, in each case satisfactory to the Lender and its counsel in their
discretion:
(a) Resolutions. The Borrower shall have furnished the Lender
------------
with certified copies of appropriate resolutions of the Borrower (1) authorizing
the execution of the following documents: this Agreement, the Revolving Credit
Notes, the Pledge Agreement, financing statements and any other documents,
instruments and agreements referred to herein which are required to be executed
and/or delivered by the Borrower and (2) authorizing consummation of the
transactions contemplated by, and performance of this Agreement.
(b) Articles of Organization and Operating Agreement. The
--------------------------------------------------
Borrower shall have furnished the Lender with a copy of the Borrower's Articles
of Organization and Operating Agreement and all amendments to each.
(c) Certificates of Existence. The Borrower shall have
----------------------------
furnished the Lender with a certificate of existence of recent date issued by
the Secretary of State of the Commonwealth of Kentucky, certifying that it is
duly organized and validly existing under the laws of the Commonwealth of
Kentucky. The Borrower shall also have furnished the Lender with certificates of
existence with respect to the Partnerships from appropriate offices in Georgia,
Kentucky, Maryland and Florida.
-11-
(d) Opinion of Counsel for the Borrower and the Guarantors.
----------------------------------------------------------
The Borrower and the Guarantors shall have furnished the Lender, at the
Borrower's expense, with the legal opinion of ▇▇▇▇▇▇▇▇▇▇, Doll & ▇▇▇▇▇▇▇▇ PLLC,
as counsel for the Borrower, addressed to the Lender, dated the date of this
Agreement, addressing the matters set forth in Annex C, and otherwise
satisfactory to the Lender and its counsel.
(e) Certificates of Incumbency of the Borrower. The Borrower
-------------------------------------------
shall have furnished the Lender with a certificate of its secretary certifying
the names of the officers of the Borrower authorized to sign the Borrower
Documents, together with the true signatures of such officers.
(f) Executed Documents. The Borrower shall have duly executed
-------------------
and shall have delivered to the Lender each of the following documents in
subparagraphs (1) through (5), and the Guarantors shall have executed and
delivered to the Lender the documents set forth in paragraphs (1) and (4) below:
(1) this Agreement;
(2) the three Revolving Credit Notes;
(3) the Pledge Agreement;
(4) the Guaranty Agreements; and
(5) such UCC-1 financing statements or other
documents for filing with public officials with respect to the Pledge Agreement
as the Lender may request.
(g) Partnership Notices and Acknowledgements. The Borrower
-------------------------------------------
shall have caused each Partnership to have countersigned and delivered to the
Lender Partnership Notices and Acknowledgements with respect to each, every and
all of the Partnership Interests described on Schedule 1(P) to this Agreement.
(h) Representations and Warranties. Each and every
-----------------------------------
representation and warranty made by or on behalf of the Borrower at the time of
or after the execution of this Agreement relating to the Borrower Documents or
the transactions contemplated thereby shall be true, complete and correct in all
material respects on and as of the date such Loan is to be made.
(i) No Defaults. There shall exist no Event of Default or
-------------
Unmatured Default which has not been cured to the Lender's satisfaction.
(j) No Change in the Borrower's Condition. There shall have
---------------------------------------
been no material adverse change in the condition, financial or otherwise of the
Borrower from that existing on the date of the financial statements described in
Section 6.08 of this Agreement.
-12-
(k) Recordings and Filings. The Lender shall have received
------------------------
evidence satisfactory to it that all financing statements or other instruments,
as the Lender may reasonably request, have been executed and delivered by the
Borrower and filed or recorded in such public offices as the Lender may request
to perfect and maintain the perfection of the security interests which secure
the Loan, and to release any security interests, financing statements and/or
other liens or encumbrances on any of the Collateral other than such interests,
liens or encumbrances in favor of the Lender.
(l) Counsel Fees. The Borrower shall have paid the Lender's
-------------
counsel fees and expenses in accordance with Section 9.01 of this Agreement.
(m) Results of Records Searches. The Borrower shall have
------------------------------
delivered to the Lender results of searches of the records of such public
offices as the Lender may require with respect to liens, encumbrances or other
interests with respect to all existing Partnership Interests, disclosing no
liens, encumbrances or interests with respect to all existing Partnership
Interests other than those in favor of the Lender.
(n) Evidence of Ownership. The Borrower shall have delivered
----------------------
to the Lender evidence satisfactory to the Lender of the Borrower's ownership of
the Partnership Interests described on Schedule 1(P) to this Agreement. Without
limiting the generality of the preceding sentence, the Borrower shall have
delivered to the Lender any and all certificates and/or other writings
evidencing and/or representing those Partnership Interests, together with
assignments in blank in form and substance satisfactory to the Lender and its
counsel in their discretion.
(o) Compliance with Section 2.03. The Borrower shall have
-------------------------------
complied with Section 2.03 of this Agreement in all respects regarding such
Revolving Credit Loan.
4.02 Conditions Preceding to Subsequent Revolving Credit Loans. The
-------------------------------------------------------------
Lender's obligation to provide the Borrower with Revolving Credit Loans after
the first Revolving Credit Loan shall be conditioned upon the fulfillment of the
conditions in Sections 4.01(g) with respect to the Partnership Interests being
acquired, in whole or in part with the proceeds of such Revolving Credit Loan or
Loans, and upon fulfillment of the conditions in Sections 4.01 (h), (i), (j),
(k), (n) and (o) with respect to such Revolving Credit Loans.
SECTION V
---------
General Covenants
-----------------
During the term of this Agreement, the Borrower shall comply with all
of the following provisions:
5.01 Insurance. The Borrower shall maintain insurance as follows:
----------
(a) Liability Insurance. The Borrower at its own cost and
---------------------
expense, shall procure, maintain and carry in full force and effect general
liability, public liability, workers'
-13-
compensation liability, environmental hazard liability and property damage
insurance with respect to the actions and operations of the Borrower to such
extent, in such amounts and with such deductibles as are carried by prudent
businesses similarly situated, but in any event not less than the amounts of
coverage per person and per occurrence, and with the deductibles, as are
provided in the Borrower's insurance in effect on the date of this Agreement.
Without limiting the foregoing, such insurance shall insure against any
liability for loss, injury, damage or claims caused by or arising out of or in
connection with the operation of the Borrower's business including injury to or
death of the Borrower's employees, agents or any other persons and damage to or
destruction of public or private property.
(b) Physical Damage Insurance. The Borrower at its own cost
----------------------------
and expense, shall insure all of its insurable properties to such extent,
against such hazards (including, without limitation, environmental hazards), in
the amount of coverage and with such deductibles as are carried by prudent
businesses similarly situated, but in any event insuring against such hazards
and with such coverages and deductibles as are provided in the Borrower's
insurance in effect on the date of this Agreement, and in any event in amounts
of coverage not less than the insurable value of the property insured. Without
limiting the foregoing, such insurance shall name the Lender as an additional
insured and shall provide for payment of the proceeds thereof to the Borrower
and to the Lender as their interests may appear.
(c) General Insurance Requirements.
------------------------------
(1) All insurance which the Borrower is required to
maintain shall be satisfactory to the Lender in form, amount and insurer. Such
insurance shall provide that any loss thereunder shall be payable
notwithstanding any action, inaction, breach of warranty or condition, breach of
declarations, misrepresentation or negligence of the Borrower. Each policy shall
contain an agreement by the insurer that, notwithstanding lapse of a policy for
any reason, or right of cancellation by the insurer or any cancellation by the
Borrower such policy shall continue in full force for the benefit of the Lender
for at least thirty (30) days after written notice thereof to the Lender and the
Borrower, and no alteration in any such policy shall be made except upon thirty
(30) days written notice of such proposed alteration to the Lender and the
Borrower and written approval by the Lender. At or before the making of the
first Loan, the Borrower shall provide the Lender with certificates evidencing
its due compliance with the requirements of this Section.
(2) Prior to the expiration date of any policy of
insurance maintained pursuant to this Agreement, the Borrower shall provide the
Lender with a certificate of insurance evidencing the acquisition of a new
policy, or an extension or renewal of an existing policy, evidencing the
Borrower's due compliance with this Section.
(3) If the Borrower fails to acquire any policy of
insurance required to be maintained pursuant to this Section, or fails to renew
or replace any such policy at least ten (10) days prior to the expiration
thereof, or fails to keep any such policy in full force and effect, the Lender
shall have the option (but not the obligation) to pay the premiums on any such
policy of insurance or to take out new insurance in amount, type, coverage and
terms satisfactory to the Lender, after first notifying the Borrower of the
Lender's intent to pay it. Any amounts paid
-14-
therefor by the Lender shall be immediately due and payable to the Lender by the
Borrower upon demand. No exercise by the Lender of such option shall in any way
affect the provisions of this Agreement, including the provision that failure by
the Borrower to maintain the prescribed insurance shall constitute an Event of
Default.
5.02 Taxes and Other Payment Obligations.
------------------------------------
(a) The Borrower shall pay and discharge, or cause to be paid
and discharged, before any of them become in arrears, all taxes, assessments,
governmental charges, levies, and claims for labor, materials or supplies which
if unpaid might become a lien or charge upon any of their property, and all of
their other debts, obligations and liabilities.
(b) The Borrower may refrain from paying any amount it would
be required to pay pursuant to subparagraph (a) of this Section 5.02 if the
validity or amount thereof is being contested in good faith by appropriate
proceedings timely instituted which shall operate to prevent the collection or
enforcement of the obligation contested, provided that if the Borrower is
engaged in such a contest, it shall have set aside on its books appropriate
reserves with respect thereto. If the validity or amount of any such obligations
in excess of One Hundred Thousand Dollars ($100,000.00) shall be contested
pursuant to the provisions of this subparagraph, the Borrower shall notify the
Lender immediately upon the institution of the proceedings contesting the
obligation.
5.03 Financial Statements. The Borrower shall deliver to the Lender:
---------------------
(a) Annual Statements of the Borrower. As soon as available,
-----------------------------------
and in any event within one hundred twenty (120) days after the end of each
fiscal year, the Borrower shall furnish to the Lender an audited balance sheet,
income statement, statement of cash flows, for such fiscal year, prepared by the
Borrower or the CPA Firm. Together with such annual financial statements, if the
CPA Firm prepared the annual financial statements, the Borrower shall furnish
the Lender with the CPA Firm's statement that the CPA Firm has reviewed the
provisions of this Agreement and nothing has come to the CPA Firm's attention to
cause it to believe that any Event of Default or Unmatured Default exists as of
the date of the statement, or, if such is not the case, specifying such Event of
Default or Unmatured Default and the nature thereof, and the action the Borrower
has taken or will take to correct it.
(b) Annual Statements of the Guarantors. On or before June 1
-------------------------------------
of each year, each Guarantor shall provide their financial statements to the
Lender as at the preceding December 31, in such form, with such detail and of
such scope as the Lender may determine in its discretion.
(c) Additional Financial Information. The Borrower shall
--------------------------------
deliver to the Lender:
(1) Promptly upon receipt thereof, all detailed
reports, management letters and the like, if any (excluding working drafts),
submitted to the Borrower by the CPA Firm if the CPA Firm audited the books of
the Borrower.
-15-
(2) Within thirty (30) days after the respective dates
of filing the corporate federal income tax returns of the Borrower for each
year, a written statement signed by the CPA Firm that the firm has prepared or
reviewed the federal income tax returns of the Borrower for such year and in the
firm's opinion the provisions for federal taxes based on the income of the
Borrower, as recorded in the accounts, represents an adequate estimate of the
liability of the Borrower for federal taxes based on income.
(3) Promptly upon their becoming available, copies of
all financial statements, reports, notices of meetings and proxy statements
which the Borrower shall send to its members.
(4) Within thirty (30) days after the filing thereof in
the office of the Secretary of State of the Commonwealth of Kentucky, certified
copies of all amendments to the Borrower's Articles of Organization and
Operating Agreement.
(5) Such additional information with respect to the
Borrower's financial condition (including, without limitation, information
regarding the Collateral) as may be reasonably requested by the Lender from time
to time.
(e) All financial statements required under this Agreement
shall be prepared on a consolidated and consolidating basis (regardless whether
permitted or required under GAAP) for the Borrower and any Subsidiary which the
Borrower acquires or forms at any time.
5.04 Financial Records. The Borrower shall maintain a standard modern
-------------------
system of accounting in which full, true and correct entries shall be made of
all dealings or transactions in relation to its business and affairs in
accordance with GAAP applied on a basis consistent with prior years and, without
limitation, making appropriate accruals for estimated contingent losses and
liabilities.
5.05 Properties. The Borrower shall maintain its plants and other fixed
-----------
assets in good condition, subject only to normal wear and tear, and make all
necessary and proper repairs, renewals and replacements. The Borrower shall
comply with all material leases and other material agreements in order to
prevent loss or forfeiture, unless compliance is being contested in good faith
by appropriate proceedings timely instituted which shall operate to prevent
enforcement of the loss or forfeiture. The Lender shall have the right to
inspect the Borrower's plants and other fixed assets at all reasonable times,
and from time to time.
5.06 Existence and Good Standing. The Borrower shall preserve its
------------------------------
existences in good standing and shall be and remain qualified to do business and
in good standing in all states and countries in which failure to so qualify
would have a material adverse effect upon the Borrower.
-16-
5.07 Notice Requirements.
--------------------
(a) Default. The Borrower shall cause its chief officer, or in
--------
his absence an officer of the Borrower designated by it, to notify the Lender in
writing within three (3) Business Days, after the Borrower, or any of the
Borrower's members or officers, has notice of any Event of Default or Unmatured
Default or has notice that any representation or warranty made in this
Agreement, or in any related document or instrument, for any reason was not true
and complete and not misleading in any material respect when made. Such notice
shall specify the nature of such Event of Default or Unmatured Default and the
action the Borrower has taken or will take to correct it.
(b) Material Litigation. The Borrower promptly shall notify
---------------------
the Lender in writing of the institution or existence of any litigation or
administrative proceeding to which the Borrower may be or become a party which
might involve any material risk of any judgment or liability which (1) would be
in excess of One Hundred Thousand Dollars ($100,000.00), or (2) would otherwise
result in any material adverse change in the Borrower's business, assets or
condition, financial or otherwise.
(c) Other Information. From time to time, upon request by the
------------------
Lender, the Borrower shall furnish to the Lender such information regarding the
Borrower's business, assets and condition, financial or otherwise, as the Lender
may reasonably request. The Lender shall have the right during reasonable
business hours to examine all of the Borrower's business and financial books and
records and to make notes and abstracts therefrom, to make an independent
examination of the Borrower's books and records for the purpose of verifying the
accuracy of reports delivered by the Borrower and ascertaining compliance with
this Agreement.
5.08 Revolving Credit Notes and Other Borrower Documents. The Borrower
----------------------------------------------------
shall pay the Revolving Credit Notes in accordance with their respective terms,
and the Borrower shall comply with the provisions of the other Borrower
Documents.
5.09 Compliance with Law. The Borrower shall comply in all material
---------------------
respects with (a) all valid and applicable statutes, rules and regulations of
the United States of America, of the States thereof and their counties,
municipalities and other subdivisions and of any other jurisdiction applicable
to the Borrower, including, but not limited to all applicable state and federal
environmental laws and ERISA; (b) the valid and applicable orders, judgments and
decrees of all courts or administrative agencies with jurisdiction over the
Borrower; or its business; and (c) the applicable provisions of licenses issued
to the Borrower except where compliance therewith shall be currently contested
in good faith by appropriate proceedings, timely instituted, which shall operate
to stay any order with respect to such non-compliance.
5.10 Liens. Except for security interests previously granted by the
------
Borrower to the Lender contemporaneously with the execution of this Agreement
(including, without limitation, those permitted in Section 5.02(b) and those
disclosed in Section 6.13 of this Agreement), and except for liens permitted in
this Agreement, the Borrower shall not (a) create or incur or suffer to be
created or incurred or to exist any encumbrance, mortgage, pledge, lien, charge,
restriction or other security interest of any kind upon any of the Collateral,
whether owned or held on the
-17-
date of this Agreement or acquired thereafter, or upon the proceeds therefrom,
or (b) transfer any Collateral or the proceeds therefrom for the purpose of
subjecting the same to payment of indebtedness or performance of any other
obligation except payments made in accordance with Section 5.02 of this
Agreement or payments made to the Lender in accordance with the terms and
provisions of this Agreement, or (c) acquire, or agree or have an option to
acquire, any Collateral upon conditional sale or other title retention or
purchase money security agreement, device or arrangement, or (d) sell or
transfer, assign, or pledge any Collateral, with or without recourse. The
Borrower may incur or create, or suffer to be incurred or created or to exist,
the following liens without violating the provisions of this Section 5.10:
(1) Statutory liens to secure claims for labor, material or
supplies to the extent that payment thereof shall not at the time be required to
be made in accordance with Section 5.02 of this Agreement.
(2) Deposits or pledges made in connection with, or to secure
payment of, workers' compensation, unemployment insurance, old age pensions or
other social security, or in connection with contests, to the extent that
payment thereof shall not at that time be required to be made in accordance with
Section 5.02 of this Agreement.
(3) Statutory liens for taxes or assessments or governmental
charges or levies if payment shall not at the time be required to be made in
accordance with Section 5.02 of this Agreement.
(4) Statutory liens (and contractual liens that provide to the
secured party no greater rights than equivalent statutory liens) to secure
payment of rent or lease payments with respect to leases of real property to the
extent that such payments shall not at the time be required to be made in
accordance with Section 5.02 of this Agreement.
5.11 Limit on Indebtedness, Guarantees, Etc. The Borrower shall not, in
---------------------------------------
the absence of prior written consent from the Lender, incur, assume, guarantee,
or otherwise be or become liable in respect of any Indebtedness except for those
matters described in Schedule 6.12 to this Agreement, if after giving pro forma
effect to the Indebtedness, the Indebtedness would result in an Unmatured
Default or an Event of Default.
5.12 Articles of Organization and Operating Agreement. Without the
----------------------------------------------------
Lender's prior written consent, which shall not be withheld or delayed
unreasonably, the Borrower shall not make any changes in or amendments to its
Articles of Organization or Operating Agreement.
5.13 Mergers, Sales, Transfers and Other Dispositions of Assets.
-------------------------------------------------------------
Without the Lender's prior written consent, which shall not be withheld
unreasonably, the Borrower shall not:
(a) Be a party to any consolidation, reorganization (including
without limitation those types referred to in ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Internal Revenue Code of 1986, as amended), "stock-swap" or merger;
-18-
(b) Sell or otherwise transfer any material part of either its
tangible or intangible assets (except for assets that are worn out or no longer
used or useful in the Borrower's business), provided that Lender shall not
withhold its consent if Borrower demonstrates to the satisfaction of the Lender,
pursuant to pro forma financial statements and other relevant information based
on assumptions acceptable to the Lender that after giving effect to the proposed
sale or transfer no Event of Default or Unmatured Event of Default shall exist
under this Agreement;
(c) Purchase all or a substantial part of the capital
stock or assets of any corporation or other business enterprise;
(d) Effect any change in its capital structure; or
(e) Liquidate or dissolve or take any corporate action
with a view toward liquidation or dissolution.
5.14 Loans. The Borrower shall not make any loan or advance any funds
------
whatsoever to any business, entity, party or individual, except advances not to
exceed Five Hundred Thousand Dollars ($500,000.00), in the aggregate at any one
time outstanding.
5.15 No Change in Ownership. The Borrower shall not permit the
--------------------------
ownership interest of the Guarantors (and/or any Person who becomes an owner of
an interest in the Borrower upon the death of one of the Guarantors through
bequest or devise) to be reduced to less than one hundred percent (100%) of the
outstanding membership interests of the Borrower.
5.16 Payment of Distributions. In any fiscal year, the Borrower shall
--------------------------
not pay out any Distributions in excess of the Borrower's Net Income for that
fiscal year and in no event shall the Borrower pay out any Distribution while
any Unmatured Default or Event of Default is in existence.
5.17 ERISA Compliance.
-----------------
(a) Relationship of Vested Benefits to Pension Plan Assets.
---------------------------------------------------------
The Borrower will at all times maintain the qualified status of its Plans. The
Borrower will not at any time terminate any Plan unless on the date of such
termination the present value of all employee benefits vested under such Plan
does not exceed the present value of the assets allocable to such vested
benefits.
(b) Valuations. All assumptions and methods used to determine
-----------
the actuarial valuation of vested employee benefits under Plans at any time
maintained by the Borrower and the present value of assets of such Plans shall
be reasonable in the good faith judgment of the Borrower and shall comply with
all requirements of law in all material respects.
(c) Prohibited Actions. Neither the Borrower nor any Plan at
-------------------
any time maintained by the Borrower will:
-19-
(1) engage in any "prohibited transactions" (as such
term is defined in Section 406 or Section 2003(a) of ERISA);
(2) incur any "accumulated funding deficiency" (as such
term is defined in Section 302 of ERISA) whether or not waived; or
(3) terminate any such Plan in a manner which could
result in the imposition of a Lien on the property of the Borrower pursuant to
Section 4006 of ERISA.
5.18 Joinder of Subsidiaries. If the Borrower creates or acquires any
-------------------------
Subsidiary, the Borrower shall cause such subsidiary to execute and deliver to
the Lender an agreement (a "Joinder Agreement") substantially in the form
attached as Annex D pursuant to which such Subsidiary shall join as a Borrower
hereunder and under each document to which the Borrower is named as a party. The
Borrower shall cause the Joinder Agreement to be delivered to the Lender within
five (5) Business Days after the date of the filing of such Subsidiary's
articles of incorporation if the Subsidiary is a corporation, the date of the
filing of its certificate of limited partnership if it is a limited partnership,
or the date of its organization if it is an entity other than a corporation or a
limited partnership.
SECTION VI
----------
Representations and Warranties
------------------------------
To induce the Lender to enter into this Agreement and the Lender to
make the Revolving Credit Loan, the Borrower and the Guarantors represent and
warrant to the Lender as follows, (which warranties and representations shall be
deemed to be remade and restated in full (subject only to changes of
circumstances which (1) are fully disclosed by the Borrower to the Lender in
writing, describing the changed circumstances, and (2) do not result in any
violation of any condition, provision, promise and/or covenant of this
Agreement, or otherwise result in an Unmatured Default or an Event of Default)
whenever an advance under the Revolving Credit Loan is requested by the
Borrower):
6.01 Organization and Existence. The Borrower is a limited liability
---------------------------
company duly organized, validly existing, and in good standing under the laws of
the Commonwealth of Kentucky. The Borrower has all necessary power and authority
to carry on its business conducted on the date of this Agreement. The Borrower
is qualified to do business as a foreign limited partnership, and is in good
standing, in all states and in all foreign countries in which it owns any
property or carries on substantial activities or is otherwise required to be so
qualified, and is duly authorized, qualified and licensed under all laws,
regulations, ordinances or orders of public authorities to carry on its business
in the places and in the manner conducted on the date of this Agreement.
6.02 Right to Act. No registration with or consent or approval of any
-------------
governmental agency of any kind is required for the execution, delivery,
performance and enforceability of the Borrower Documents. The Borrower has full
power and authority, corporate and otherwise, to execute, deliver and perform
the Borrower Documents.
-20-
6.03 No Conflicts. The Borrower's execution, delivery and performance
-------------
of the Borrower Documents do not, and will not, (a) violate any existing
provision Articles of Organization or Operating Agreement of the Borrower or any
law, rule, regulation, or judgment, order or decree applicable to the Borrower
or (b) otherwise constitute a default, or result in the imposition of any lien
under (1) any material existing contract or other obligation binding upon the
Borrower or its property, with or without the passage of time or the giving of
notice or both; (2) any law, rule or regulation applicable to the Borrower or
its business; or (3) any judgment, order or decree of any court or
administrative agency applicable to the Borrower or its business.
6.04 Authorization. The execution, delivery and performance by the
--------------
Borrower of the Borrower Documents has been duly authorized, and the Borrower
Documents have been duly executed and delivered.
6.05 Enforceable Agreements. This Agreement and the other Borrower
------------------------
Documents are legally valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or limiting creditors rights or equitable
principals generally.
6.06 Contingent Obligations. The Borrower does not have any material
------------------------
contingent obligations, material liabilities for taxes, material long-term
leases or unusual material forward or long-term commitments, which have not been
disclosed to the Lender.
6.07 Litigation. Except for those matters described in the financial
-----------
statements referenced in Section 6.08 of this Agreement or otherwise disclosed
in writing by the Borrower to Lender, there is no litigation, at law or in
equity, or any proceeding before any federal, state or municipal court, board or
other governmental or administrative agency pending, or to the knowledge of the
Borrower, threatened which is likely to involve any material judgment or
liability against the Borrower or which might otherwise result in any material
adverse change in the Borrower's business, assets or condition, financial or
otherwise. No judgment, decree or order of any federal, state or municipal
court, board or other governmental or administrative agency has been issued
against the Borrower or any of its assets which has, or will likely have, a
material adverse effect on the Borrower's business, assets or condition,
financial or otherwise.
6.08 Financial Statements. The Borrower's financial statements dated
----------------------
April 30, 2000, have been furnished to the Lender. Those financial statements
are true and complete in all material respects, have been prepared in accordance
with GAAP, do not omit reference to any material contingent liabilities of any
kind not otherwise disclosed by Borrower to the Lender in writing, and fairly
present the financial condition of the Borrower as of the date of those
financial statements. ▇▇▇▇▇▇▇' financial statements dated December 31, 1999, and
▇▇▇▇▇'▇ financial statements dated March 31, 2000, have been furnished to the
Lender. Those financial statements are true and complete in all material
respects, do not omit reference to any material contingent liabilities of any
kind not otherwise disclosed by Borrower to the Lender in writing and fairly
present the financial condition of the ▇▇▇▇▇▇▇ and ▇▇▇▇▇, respectively, as of
the date of the financial statements.
-21-
6.09 Compliance with Contractual Obligations, Laws and Judgments.
------------------------------------------------------------
(a) The Borrower is not in default in the payment,
performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any lease, indenture, mortgage, deed of
trust, promissory note, agreement or undertaking to which it is a party or by
which its assets are bound.
(b) The Borrower has not violated any applicable statute,
regulation or ordinance of the United States of America or of any state,
municipality or any other subdivision, jurisdiction or agency thereof, in any
respect materially and adversely affecting the Borrower's business, property,
assets, operations or conditions, financial or otherwise.
(c) The Borrower is not in default with respect to any
judgment, order, writ, injunction, decree or demand of any court, arbitrator or
governmental agency or body.
6.10 Investment Company. The Borrower is not an "investment company"
-------------------
or a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
6.11 Tax Returns. The Borrower has filed all tax returns which are
-------------
required to be filed and has paid, or made adequate provision for the payment
of, all taxes which have or may become due pursuant to such returns or pursuant
to assessments received. The Borrower knows of no material additional
assessments for which adequate reserves have not been established, and the
Borrower has made adequate provision for all current taxes.
6.12 No Undisclosed Liabilities or Guaranties. The Borrower does not
-------------------------------------------
have any material liabilities, direct or contingent, except as disclosed or
referred to in the financial statements referred to in Section 5.03 of this
Agreement or otherwise disclosed to Lender in writing or incurred by Borrower
after such date and not prohibited by the express terms of this Agreement, nor
has the Borrower guaranteed, or otherwise become responsible for, the material
obligations of any person, firm or corporation, other than as set out on
Schedule 10.12 of this Agreement or otherwise not in contravention of any of the
Borrower Documents.
6.13 Title to Properties. The Borrower has good and marketable title to
--------------------
all of its property and assets of all character, free and clear of all
mortgages, liens, interests, and encumbrances except (a) encumbrances granted to
the Lender, (b) minor irregularities in title which do not materially interfere
with the use and enjoyment by the Borrower of such properties and assets in the
normal course of business as presently conducted, or materially impair the value
thereof for such business, (c) those encumbrances described on Schedule 6.13 to
this Agreement, and (d) any other encumbrances permitted under the express terms
of the Borrower Documents.
6.14 Trademarks and Permits. The Borrower possesses adequate licenses,
-----------------------
patents, copyrights, trademarks and trade names to conduct their businesses as
now conducted. Neither the Borrower nor any of its officers, directors or
employees has received notice or has knowledge of any claim that the Borrower
has violated any other person's license, patent, copyright,
-22-
trademark or trade name, or that the Borrower's licenses, patents, copyrights,
trademarks or trade names are currently being infringed. The Borrower has all
governmental permits, certificates, consents and franchises necessary to carry
on their businesses as now conducted and to own or lease and operate their
properties as now owned, leased or operated. All such governmental permits,
certificates, consents and franchises are valid, and in effect, and the Borrower
is not in violation thereof, and none of them contains any term, provision,
condition or limitation more burdensome than generally applicable to persons
engaged in the same or similar business.
6.15 No Defaults. The Borrower is not in default in the payment or
-------------
performance of any of its obligations or in the performance of any mortgage,
indenture, lease, contract or other agreement, instrument or undertaking to
which it is a party or by which it or any of its assets may be bound, which
default would have a material adverse effect on the business operations, assets
or condition, financial or otherwise, of the Borrower, taken as a whole. No
Unmatured Default or Event of Default hereunder or under the other Borrower
Documents has occurred and is continuing. The Borrower is not in default under
any order, award or decree of any court, arbitrator or governmental authority
binding upon or affecting it or by which any of its assets may be bound or
affected which default would have a material adverse effect on the business of
such Borrower. The Borrower is not subject to any order, award or decree which
is likely to materially adversely affect the ability of the Borrower to carry on
its business as currently conducted or the ability of the Borrower to perform
its obligations under this Agreement and/or the other Borrower Documents to
which it is a party.
6.16 Employee Benefit Plans. Except as have been otherwise disclosed in
-----------------------
writing to the Lender, any Plans in existence are in substantial compliance with
ERISA, no Plan is insolvent or in reorganization, no Plan has an accumulated or
waived funding deficiency within the meaning of Section 412 of the Code, the
Borrower has not incurred any material liability (including any material
contingent liability) to or on account of a Plan pursuant to Sections 4062,
4063, 4064, 4201 or 4204 of ERISA, no proceedings have been instituted to
terminate any Plan, and no condition exists which presents a material risk to
the Borrower of incurring a liability to or on account of a Plan pursuant to any
of the foregoing sections of ERISA.
6.17 No Material Adverse Conditions. There is no fact known to the
----------------------------------
Borrower (other than matters of a general economic or political nature) which
materially adversely affects the business, property, assets or financial
condition of the Borrower which has not been disclosed to the Lender or set
forth in the other documents, certificates and statements furnished to the
Lender by or on behalf of the Borrower prior to the date hereof in connection
with the transactions contemplated hereby.
6.18 Regulations Q and U. The Borrower is not engaged principally, or
--------------------
as one of the Borrower's important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation Q of the Board of Governors of the Federal Reserve
System), and will not use the proceeds of the Loans so as to violate Regulation
U as it may be amended or interpreted from time to time by the Board of
Governors of the Federal Reserve System.
6.19 Environmental Matters. Except as otherwise disclosed in
------------------------
writing to the Lender,
-23-
the Borrower fully complies with all federal, state and local environmental
laws, rules, regulations, ordinances and other requirements including, without
limitation, those which relate to the production, storage, disposal or use of
any and all hazardous or toxic wastes, and including, without limitation, the
provisions of 42 U.S.C.ss.ss.9601 et seq. (CERCLA, Super Fund); and 42
U.S.C.ss.ss.6901 et seq. (RCRA). --------
-------
6.20 No Public Utility Holding Company. The Borrower is not a
----------------------------------
"holding company," or a "subsidiary company" of a "holding company," or an
affiliate of either, within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
6.21 No Subsidiaries. The Borrower has no Subsidiaries.
----------------
6.22 Disclosure. Neither this Agreement, nor any agreement, document,
-----------
certificate or statement furnished to the Lender by or on behalf of the Borrower
in connection with the transactions contemplated by this Agreement contains any
untrue statement of any material fact or, except in the case of budgets and
forward financial forecasts, omits to state any material fact necessary to make
the statements contained herein or therein not misleading as of the time the
Borrower makes the statement; provided however, that the Borrower has an
immediate and continuing obligation to supplement any of the foregoing if it
should subsequently contain an untrue statement of any material fact or omits to
state any material fact necessary to make the statements contained herein or
therein not misleading. There is no fact known to the Borrower which materially
and adversely affects, or in the future is likely to materially and adversely
affect, the Borrower's business, operations, affairs or condition, financial or
otherwise, which has not been disclosed to the Lender.
SECTION VII
-----------
Events of Default
-----------------
The occurrence of any one or more of the following shall constitute an
Event of Default under this Agreement (an "Event of Default"):
7.01 Failure to Pay. If the Borrower shall fail to pay in full any
----------------
installment of principal or interest on any of the Notes, or payments required
by this Agreement, within five (5) days after such payment first became due.
7.02 No Notice Required. If the Borrower with respect to the following
-------------------
provisions shall fail to observe, perform or comply with any term, obligation,
covenant, agreement, condition or other provision contained in Sections 5.02,
5.04, 5.07, 5.10, 5.12, 5.13, 5.15, or 5.18 of this Agreement, or any Event of
Default occurs under any of the other Borrower Documents.
7.03 Notice Required. If the Borrower with respect to any term,
-----------------
obligation, covenant, agreement, condition or other provision (other than those
referred to in Sections 9.01 or 9.02 hereof) contained or referred to in any of
the Borrower Documents shall fail to observe, perform or comply with those
provisions, and such failure shall not have been fully corrected within thirty
(30) days after the Lender has given written notice thereof to such obligor.
-24-
7.04 Falsity of Representation or Warranty. If any representation or
---------------------------------------
warranty or other statement of fact contained in any of the Borrower Documents
or in any writing, certificate, report or statement at any time furnished the
Lender by or on behalf of the Borrower pursuant to or in connection with this
Agreement shall have been false or misleading in any material respect or which
shall omit a material fact, whether or not made with knowledge, at the time it
was made.
7.05 Judgments. If a final judgment or judgments for the payment of
----------
money in excess of the sum of One Hundred Thousand Dollars ($100,000.00), in the
aggregate, or with respect to property with a value in excess of such amount,
shall be rendered against the Borrower and such judgment or judgments shall
remain unsatisfied for a period of thirty (30) consecutive days after the entry
thereof and within that thirty (30) days has not been (a) stayed pending appeal,
or (b) discharged.
7.06 Adverse Financial Change. If there should be any material adverse
--------------------------
change in the financial condition of the Borrower as determined in Lender's
discretion, from its financial condition as shown on the financial statements
referred to in Section 6.08 of this Agreement, and such adverse change is not
fully corrected to Lender's reasonable satisfaction within sixty (60) days after
notice with respect thereto from the Lender.
7.07 Other Obligations. Subject to the exception contained in Section
------------------
5.02(b) of this Agreement, if the Borrower shall fail to observe, perform or
comply with the terms, obligations, covenants, agreements, conditions or other
provisions of any agreement, document or instrument (including leases) other
than this Agreement and the other Borrower Documents which (a) the Lender or any
of its Affiliates has entered into with the Borrower and which involves any
Indebtedness to the Lender and/or any of its Affiliates in any amount or (b) any
other Person has entered into with the Borrower and/or any of its Affiliates
which involves Indebtedness (or in the case of leases, in total lease
obligations under any single lease) in any single instance exceeding Five
Hundred Thousand Dollars ($500,000.00).
7.08 Dissolution or Termination of Existence. If the Borrower, either
----------------------------------------
Guarantor and/or any Affiliate of the Borrower takes any action that is intended
to result in the termination, dissolution or liquidation of the Borrower.
7.09 Solvency.
---------
(a) If the Borrower or either Guarantor shall (1) have an
order of relief entered in any proceeding filed by it under the federal
bankruptcy laws (as in effect on the date of this Agreement or as they may be
amended from time to time); (2) admit its inability to pay its debts generally
as they become due; (3) become insolvent in that its total assets are in the
aggregate worth less than all of its liabilities or it is unable to pay its
debts generally as they become due; (4) make a general assignment for the
benefit of creditors; (5) file a petition, or admit (by answer, default or
otherwise) the material allegations of any petition filed against it, in
bankruptcy under the federal bankruptcy laws (as in effect on the date of this
Agreement or as they may be amended from time to time), or under any other law
for the relief of debtors, or for
-25-
the discharge, arrangement or compromise of their debts; or (6) consent to the
appointment of a receiver, conservator, trustee or liquidator of all or part of
its assets.
(b) If a petition shall have been filed against the Borrower
or either Guarantor in proceedings under the federal bankruptcy laws (as in
effect on the date of this Agreement, or as they may be amended from time to
time), or under any other laws for the relief of debtors, or for the discharge,
arrangement or compromise of their debts, or an order shall be entered by any
court of competent jurisdiction appointing a receiver, conservator, trustee or
liquidator of all or part of the Borrower's assets, and such petition or order
is not dismissed or stayed within sixty (60) consecutive days after entry
thereof.
SECTION VIII
------------
Remedies Upon Default
---------------------
Notwithstanding anything to the contrary, if any Event of Default
occurs under Section 7.09 of this Agreement, the Revolving Credit shall
automatically terminate (if not previously terminated or expired), and the
entire unpaid balance of all Revolving Credit Loans and Revolving Credit Notes,
and all other obligations of the Borrower under and/or in connection with the
Borrower Documents, shall automatically, without requirement of any presentment,
demand or notice of any kind (all of which are hereby waived by the Borrower),
become immediately due and payable in full. Also notwithstanding any other
provision of this Agreement, if any other Event of Default under this Agreement
occurs, the Lender, in its individual discretion, and without notice to the
Borrower, may terminate the Revolving Credit, in which case the Lender shall be
under no further obligation to grant any Revolving Credit Loans to the Borrower.
In addition, upon the occurrence of any Event of Default, and at any time
thereafter, unless all Events of Default have been waived in a writing signed by
the Lender specifically providing the waiver, the Lender shall have all of the
following rights and remedies and it may exercise one or more of them, singly or
in conjunction with others.
8.01 Right to Offset. The Lender shall have the right to set off
-----------------
against, or appropriate and apply toward the payment of, the obligations of the
Borrower to that Lender, pursuant to this Agreement or as evidenced by the
Revolving Credit Notes whether such obligations shall have matured in due course
or by acceleration, any and all deposit balances and other sums and indebtedness
then held or owed by that Lender to or for the credit or account of the Borrower
and/or either Guarantor. For such purpose the Borrower and each Guarantor hereby
pledges to and grants a security interest in such deposit balances, other sums
and indebtedness of the Lender to secure all of the Borrower's obligations under
this Agreement and the Revolving Credit Notes. Such offsets following an Event
of Default may occur without notice to or demand upon the Borrower, either
Guarantor or any other Person, all of such notices and demands being hereby
waived.
8.02 Enforcement of Rights. The Lender shall have the right, to proceed
----------------------
to protect and enforce its rights by suit in equity, action at law or other
appropriate proceedings either for specific performance of any covenant or
condition contained in any of the Borrower Documents, or in aid of the exercise
of any power granted in any of the Borrower Documents.
-26-
8.03 Rights Under Security Instruments. The Lender shall also have all
----------------------------------
rights and remedies granted it under the Pledge Agreement, the Guaranty
Agreements and any and all other Borrower Documents securing or intending to
secure the Borrower's obligations under the Revolving Credit Notes, or any other
indebtedness or obligation of the Borrower under the Borrower Documents.
8.04 Cumulative Remedies. All of the rights and remedies of the Lender
--------------------
upon occurrence of an Event of Default shall be cumulative to the greatest
extent permitted by law, may be exercised successively or concurrently, from
time to time, and shall be in addition to all of those rights and remedies
afforded the Lender at law, or in equity, or in bankruptcy. Notwithstanding the
foregoing, the Lender shall be entitled to recover from the cumulative exercise
of all remedies an amount no greater than the sum of (a) the aggregate
outstanding principal amount of the Loan, (b) all accrued but unpaid interest
with respect to the aggregate principal amount of the Loan, (c) any other
amounts that the Borrower is required by this Agreement to pay to the Lender
(for example, and without limitation, the reimbursement of expenses and legal
fees, and late charges), and (d) any costs, expenses or damages which the Lender
is otherwise permitted to recover by the terms of this Agreement. Any exercise
of any right or remedy shall not be deemed to be an election of that right or
remedy to the exclusion of any other right or remedy.
SECTION IX
----------
Fees and Expenses
-----------------
9.01 Transaction Expenses. The Borrower shall pay to the Lender upon
----------------------
demand all out-of-pocket expenses incurred by the Lender in connection with the
transactions contemplated by this Agreement, including, but not limited to the
Lender's reasonable attorneys' fees incurred in preparing, negotiating and
closing the Borrower Documents and any and all costs and fees incurred in
connection with the recording or filing of any documents or instruments, and/or
in searches of, any public office, pursuant to or as a consequence of this
Agreement, or to perfect or protect any security for the Loans. The Borrower
shall also pay to the Lender, promptly following the Lender's request, all
out-of-pocket expenses incurred by the Lender from time to time in the
administration of the Loans, including, without limitation, any out-of-pocket
expenses (including, but not limited to, attorneys' fees) incurred by the Lender
if any of the Borrower Documents should be amended, extended and/or renewed from
time to time, or if additional Borrower Documents are prepared.
9.02 Enforcement Expenses. If any Event of Default shall occur under
----------------------
this Agreement, or any default shall occur under any of the Borrower Documents
or any related documents, the Borrower shall pay to the Lender, to the extent
allowable by applicable law, such amounts as shall be sufficient to reimburse
the Lender fully for all of its costs and expenses incurred in enforcing and/or
protecting its rights and remedies under the Borrower Documents and any related
documents, including without limitation its reasonable attorneys' fees and court
costs. Such amounts shall be deemed to be included in the obligations secured by
the Security Agreement.
-27-
SECTION X
---------
Miscellaneous Provisions
------------------------
10.01 Business Days. If any provision of this Agreement or any of the
---------------
other Borrower Documents requires that the Borrower make any payment, or
otherwise perform any act, on a day on which the Lender is not open for
business, then that payment or action shall be deemed to be due on the first day
thereafter that the Lender is open for business.
10.02 Term of this Agreement. The term of this Agreement shall commence
-----------------------
as of the date hereof, and continue until all Loans and accrued but unpaid
interest thereon shall have been paid in full and the Borrower shall have paid
or performed all of its obligations hereunder.
10.03 No Waivers. Failure or delay by the Lender in exercising any
------------
rights shall not be deemed to be or operate as a waiver of that right, nor shall
any right be exclusive of any other right referred to in this Agreement, or in
any other related document, or available at law or in equity, by statute or
otherwise. Any single or partial exercise of any right shall not preclude the
further exercise of that right. Every right of the Lender shall continue in full
force and effect until such right is specifically waived in a writing signed by
the Lender.
10.04 Course of Dealing. No course of dealing between the Borrower, the
------------------
Guarantors and the Lender shall operate as a waiver of any of the Lender's
rights under any of the Borrower Documents.
10.05 Certain Waivers by the Borrower and the Guarantors. The Borrower
---------------------------------------------------
and each Guarantor hereby waives, to the extent permitted by applicable law, (a)
all presentments, demands for performances, notices of nonperformance (except to
the extent specifically required by this Agreement or any other of the Borrower
Documents), protests, notices of protest and notices of dishonor in connection
with the Notes (b) any requirement of diligence or promptness on the part of the
Lender in enforcement of rights under the provisions of any of the Borrower
Documents, and (c) any requirement of marshaling assets or proceeding against
persons or assets in any particular order.
10.06 Severability. If any part, term or provision of this Agreement is
-------------
held by any court to be unenforceable or prohibited by any law applicable to
this Agreement, the rights and obligations of the parties shall be construed and
enforced with that part, term or provision limited so as to make it enforceable
to the greatest extent allowed by law, or, if it is totally unenforceable, as if
this Agreement did not contain that particular part, term or provision.
10.07 Time of the Essence. Time shall be of the essence in the
--------------------
performance of all of the Borrower's and the Guarantors' obligations under the
Borrower Documents.
10.08 Benefit and Binding Effect. This Agreement shall inure to the
----------------------------
benefit of the Lender, its successors and assigns, and all obligations of the
Borrower and the Guarantors shall bind their heirs, executors, successors and,
if and to the extent assignment is otherwise permitted by this Agreement,
assigns.
-28-
10.09 Further Assurances. The Borrower shall sign such financing
--------------------
statements or other documents or instruments as the Lender may request from time
to time more fully to create, perfect, continue, maintain or terminate the
rights and security interests intended to be granted or created pursuant to this
Agreement, the Security Agreement, and any other Borrower Documents.
10.10 Incorporation by Reference. All schedules, annexes or other
-----------------------------
attachments to this Agreement are incorporated into this Agreement as if set out
in full at the first place in this Agreement that reference is made thereto.
10.11 Entire Agreement; No Oral Modifications. This Agreement, the
-------------------------------------------
schedules and annexes hereto, and the documents and instruments referred to
herein constitute the entire agreement of the parties with respect to the
subject matter hereof, and supersede all prior understandings with respect to
the subject matter hereof. No change, modification, addition or termination of
this Agreement or any of the Borrower Documents shall be enforceable unless in
writing and signed by the party against whom enforcement is sought.
10.12 Headings. The headings used in this Agreement are included for
---------
ease of reference only and shall not be considered in the interpretation or
construction of this Agreement.
10.13 Governing Law. This Agreement and the related documents and
---------------
instruments shall be governed by and construed in accordance with the laws of
the Commonwealth of Kentucky without regard to conflicts of laws unless, except
to the extent that the laws of any other state, province or country where the
Collateral is located require that the laws of such other state, province or
country shall govern the creation, perfection or enforcement of the Lender's
rights and security interests in such Collateral.
10.14 Assignments. Neither the Borrower nor either Guarantor may assign
------------
any rights under this Agreement to any other party. Any attempted assignment
shall be a default under this Agreement and shall be null and void.
10.15 Multiple Counterparts.
----------------------
(a) This Agreement may be signed by each party upon a separate
copy, and in such case one counterpart of this Agreement shall consist of enough
of such copies to reflect the signature of each party.
(b) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement or the terms thereof to produce or
account for more than one of such counterparts.
-29-
10.16 Notices.
--------
(a) Any requirement of the Uniform Commercial Code or other
applicable law of reasonable notice shall be met if such notice is given at
least ten (10) Business Days before the time of sale, disposition or other event
or thing giving rise to the requirement of notice.
(b) Except as provided in subsection (c) below, all notices or
communications under this Agreement shall be in writing and shall be
hand-delivered, sent by courier, or mailed to the parties addressed to the
addresses as follows and any notice so addressed and (1) hand-delivered, shall
be deemed to have been given when so delivered, or (2) mailed by registered or
certified mail, return receipt requested, shall be deemed to have been given
when mailed, or (3) delivered to a recognized small package overnight courier
service to the address of the intended recipient with shipping prepaid, shall be
deemed to have been given when so delivered to such courier. Addresses for
notices are as follows:
(1) If to the Lender: BANK OF LOUISVILLE
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a courtesy copy to: ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇ PLLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(2) If to the Borrower: ORIG, LLC
10172 Linn ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
with a courtesy copy to: ▇▇▇▇▇▇▇▇▇ DOLL & ▇▇▇▇▇▇▇▇ PLLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(3) If to the Guarantor: ▇. ▇. ▇▇▇▇▇▇▇
10172 Linn ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a courtesy copy to: ▇▇▇▇▇▇▇▇▇ DOLL & ▇▇▇▇▇▇▇▇ PLLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
-30-
(4) If to the Guarantor: ▇▇▇▇▇ ▇▇▇▇▇
10172 Linn ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a courtesy copy to: ▇▇▇▇▇▇▇▇▇ DOLL & ▇▇▇▇▇▇▇▇ PLLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(c) The parties may at any time, and from time to time,
change the address or addresses to which notice shall be mailed by written
notice setting forth the changed address or addresses.
10.17 Survival of Covenants. All covenants, agreements, warranties and
----------------------
representations made by the Borrower herein shall survive the making of each
Revolving Credit Loan and the execution and delivery of the Borrower Documents,
and shall be deemed to be remade and restated by the Borrower each time the
Borrower requests a Revolving Credit Loan.
10.18. Consent to Jurisdiction. THE BORROWER AND THE GUARANTORS CONSENT
------------------------
TO ONE OR MORE ACTIONS BEING INSTITUTED AND MAINTAINED IN THE JEFFERSON COUNTY,
KENTUCKY, CIRCUIT COURT AND/OR THE UNITED STATES DISTRICT COURT FOR THE WESTERN
DISTRICT OF KENTUCKY (AT LENDER'S DISCRETION) TO ENFORCE THIS AGREEMENT AND/OR
ONE OR MORE OF THE OTHER BORROWER DOCUMENTS, AND WAIVE ANY OBJECTION TO ANY SUCH
ACTION BASED UPON LACK OF PERSONAL OR SUBJECT MATTER JURISDICTION OR IMPROPER
VENUE. THE PARTIES AGREE THAT ANY PROCESS OR OTHER LEGAL SUMMONS IN CONNECTION
WITH ANY SUCH ACTION OR PROCEEDING MAY BE SERVED BY MAILING A COPY THEREOF BY
CERTIFIED MAIL, OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL, ADDRESSED TO THE
ADDRESSES PROVIDED IN THE PREAMBLE TO THIS AGREEMENT. THE BORROWER AND THE
GUARANTORS ALSO AGREE THAT NONE OF THEM SHALL COMMENCE OR MAINTAIN ANY ACTION IN
ANY COURT, ADMINISTRATIVE AGENCY OR OTHER TRIBUNAL OTHER THAN THE JEFFERSON
COUNTY, KENTUCKY, CIRCUIT COURT OR THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF KENTUCKY WITH RESPECT TO THIS AGREEMENT, ANY OTHER OF THE
BORROWER DOCUMENTS, ANY OF THE TRANSACTIONS PROVIDED FOR OR CONTEMPLATED IN ANY
OF THE BORROWER DOCUMENTS, OR ANY CAUSE OF ACTION OR ALLEGED CAUSE OF ACTION
ARISING OUT OF OR IN CONNECTION WITH ANY DEBTOR AND CREDITOR RELATIONSHIP AMONG
THE PARTIES THAT MAY EXIST FROM TIME TO TIME.
-31-
10.20 JURY TRIAL WAIVER. THE BORROWER AND EACH GUARANTOR HEREBY WAIVES
------------------
ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT, THE REVOLVING CREDIT NOTES, THE PLEDGE AGREEMENT, THE
GUARANTY AGREEMENTS AND/OR ANY OTHER OF THE BORROWER DOCUMENTS. THIS WAIVER IS
INTENDED TO APPLY TO ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. THE BORROWER AND EACH GUARANTOR ACKNOWLEDGES THAT THIS
WAIVER IS A MATERIAL INDUCEMENT FOR THE LENDER TO ENTER INTO A BUSINESS
RELATIONSHIP, AND THAT THE LENDER HAS ALREADY RELIED ON THIS WAIVER IN ITS
DEALINGS WITH THE BORROWER AND THE GUARANTORS. THE BORROWER AND EACH GUARANTOR
FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
OF THIS AGREEMENT, THE REVOLVING CREDIT NOTES, THE PLEDGE AGREEMENT, THE
GUARANTY AGREEMENTS AND/OR THE OTHER BORROWER DOCUMENTS. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY THE
COURT.
10.21 ACKNOWLEDGEMENT. THE BORROWER ACKNOWLEDGES THAT IT HAS RECEIVED A
----------------
COPY OF THIS AGREEMENT AND EACH OF THE OTHER BORROWER DOCUMENTS, AS FULLY
EXECUTED BY THE PARTIES THERETO. THE BORROWER ACKNOWLEDGES THAT IT (A) HAS READ
THIS AGREEMENT AND THE OTHER BORROWER DOCUMENTS OR HAS CAUSED SUCH DOCUMENTS TO
BE EXAMINED BY ITS REPRESENTATIVES OR ADVISORS; (B) IS THOROUGHLY FAMILIAR WITH
THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT AND THE OTHER BORROWER
DOCUMENTS; AND (C) HAS HAD THE OPPORTUNITY TO ASK SUCH QUESTIONS TO
REPRESENTATIVES OF THE LENDER, AND RECEIVE ANSWERS THERETO, CONCERNING THE TERMS
AND CONDITIONS OF THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT AND THE OTHER
BORROWER DOCUMENTS AS IT DEEMS NECESSARY IN CONNECTION WITH THE ITS DECISION TO
ENTER INTO THIS AGREEMENT.
[THIS BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
31-A
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date set forth in the preamble hereto, but actually on the dates set forth
below.
Lender:
BANK OF LOUISVILLE
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇, Senior Vice President
Date: August 15, 2000
Borrower:
ORIG, LLC
By /s/ ▇.▇. ▇▇▇▇▇▇▇
----------------------------------------
▇. ▇. ▇▇▇▇▇▇▇, Manager
Date: August 15, 2000
/s/ ▇.▇. ▇▇▇▇▇▇▇
------------------------------------------
▇. ▇. ▇▇▇▇▇▇▇
Date: August 15, 2000
/s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
Date: August 15, 2000
-▇▇-
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇-▇ - ▇-▇ Forms of Revolving Credit Notes in favor of the
Lender
Annex B Form of Pledge Agreement
Annex C Paragraphs for Opinion of Counsel for the Borrower
and Guarantor
Annex D Form of Joinder Agreement
Annex E Form of Partnership Notice and Acknowledgement
Schedules
Schedule 1(P) Partnership Interests
Schedule 10.12 Permitted Liabilities
Schedule 10.13 Permitted Encumbrances