EXHIBIT 10.1
------------
LOAN AGREEMENT
dated as of October 5, 2007
by and between
▇▇▇▇▇▇▇▇, INC.,
as Borrower,
and
U.S. BANK NATIONAL ASSOCIATION,
as Bank
TABLE OF CONTENTS
Page
1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms . . . . . . . . . . . . . . . . . . . 8
1.3 Other Terms Defined in UCC . . . . . . . . . . . . . . 8
1.4 Other Definitional Provisions; Construction. . . . . . 8
2. COMMITMENT OF THE BANK . . . . . . . . . . . . . . . . . . . 9
2.1 Revolving Loans. . . . . . . . . . . . . . . . . . . . 9
2.2 Additional LIBOR Loan Provisions . . . . . . . . . . . 10
2.3 Interest and Fee Computation; Collection of Funds. . . 11
2.4 Letters of Credit. . . . . . . . . . . . . . . . . . . 11
2.5 Letter of Credit Collateral Account. . . . . . . . . . 11
2.6 All Loans to Constitute One Obligation . . . . . . . . 12
3. CONDITIONS OF BORROWING. . . . . . . . . . . . . . . . . . . 12
3.1 Loan Documents . . . . . . . . . . . . . . . . . . . . 12
3.2 Event of Default . . . . . . . . . . . . . . . . . . . 13
3.3 Adverse Changes. . . . . . . . . . . . . . . . . . . . 13
3.4 Litigation . . . . . . . . . . . . . . . . . . . . . . 13
3.5 Representations and Warranties . . . . . . . . . . . . 13
4. NOTES EVIDENCING LOANS . . . . . . . . . . . . . . . . . . . 13
4.1 Revolving Note . . . . . . . . . . . . . . . . . . . . 13
5. LOANS: MANNER OF BORROWING AND GENERAL TERMS. . . . . . . . 14
5.1 Borrowing Procedures . . . . . . . . . . . . . . . . . 14
5.2 Letters of Credit. . . . . . . . . . . . . . . . . . . 14
5.3 Payments to the Bank . . . . . . . . . . . . . . . . . 15
5.4 Automatic Debit. . . . . . . . . . . . . . . . . . . . 15
5.5 Conditions Precedent Events. . . . . . . . . . . . . . 15
5.6 Offset . . . . . . . . . . . . . . . . . . . . . . . . 15
5.7 Discretionary Disbursements. . . . . . . . . . . . . . 15
5.8 Credit Termination Date; Continuance
of Obligations, Etc. . . . . . . . . . . . . . . . . . 15
6. RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 16
7.1 Borrower's Organization and Name . . . . . . . . . . . 16
7.2 Authorization; Validity. . . . . . . . . . . . . . . . 16
7.3 Compliance with Laws . . . . . . . . . . . . . . . . . 16
7.4 Environmental Laws and Hazardous Substances. . . . . . 16
7.5 Absence of Breach. . . . . . . . . . . . . . . . . . . 17
7.6 Asset Representations. . . . . . . . . . . . . . . . . 17
7.7 Financial Statements . . . . . . . . . . . . . . . . . 17
7.8 Litigation and Taxes . . . . . . . . . . . . . . . . . 17
7.9 Event of Default . . . . . . . . . . . . . . . . . . . 18
7.10 ERISA Obligations. . . . . . . . . . . . . . . . . . . 18
7.11 Adverse Circumstances. . . . . . . . . . . . . . . . . 18
7.12 Lending Relationship . . . . . . . . . . . . . . . . . 18
7.13 Reserved . . . . . . . . . . . . . . . . . . . . . . . 18
7.14 Compliance with Regulation U . . . . . . . . . . . . . 18
7.15 Governmental Regulation. . . . . . . . . . . . . . . . 18
7.16 Bank Accounts. . . . . . . . . . . . . . . . . . . . . 18
7.17 Place of Business. . . . . . . . . . . . . . . . . . . 18
7.18 Complete Information . . . . . . . . . . . . . . . . . 19
7.19 Solvency, etc. . . . . . . . . . . . . . . . . . . . . 19
i
TABLE OF CONTENTS
(continued)
Page
8. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 19
8.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . 19
8.2 Encumbrances . . . . . . . . . . . . . . . . . . . . . 19
8.3 Investments. . . . . . . . . . . . . . . . . . . . . . 20
8.4 Transfer; Merger . . . . . . . . . . . . . . . . . . . 20
8.5 Issuance of Stock. . . . . . . . . . . . . . . . . . . 21
8.6 Restricted Payments/Distributions. . . . . . . . . . . 22
8.7 Use of Proceeds. . . . . . . . . . . . . . . . . . . . 22
8.8 Intentionally Omitted. . . . . . . . . . . . . . . . . 22
8.9 Change of Legal Status . . . . . . . . . . . . . . . . 22
9. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . 22
9.1 Compliance with Bank Regulatory Requirements . . . . . 22
9.2 Corporate Existence. . . . . . . . . . . . . . . . . . 22
9.3 Maintain Property. . . . . . . . . . . . . . . . . . . 23
9.4 Maintain Insurance . . . . . . . . . . . . . . . . . . 23
9.5 Tax Liabilities. . . . . . . . . . . . . . . . . . . . 23
9.6 ERISA Liabilities; Employee Plans. . . . . . . . . . . 23
9.7 Reporting Requirements . . . . . . . . . . . . . . . . 23
9.8 Supplemental Financial Statements. . . . . . . . . . . 25
9.9 Notice of Proceedings. . . . . . . . . . . . . . . . . 25
9.10 Banking Relationship . . . . . . . . . . . . . . . . . 25
10. FINANCIAL COVENANTS. . . . . . . . . . . . . . . . . . . . . 25
10.1 Tangible Net Worth . . . . . . . . . . . . . . . . . . 25
10.2 Funded Debt to EBITDA. . . . . . . . . . . . . . . . . 25
11. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . 25
11.1 Nonpayment of Obligations. . . . . . . . . . . . . . . 25
11.2 Misrepresentation. . . . . . . . . . . . . . . . . . . 25
11.3 Nonperformance . . . . . . . . . . . . . . . . . . . . 26
11.4 Default under Loan Documents . . . . . . . . . . . . . 26
11.5 Default under Other Agreements . . . . . . . . . . . . 26
11.6 Assignment for Creditors . . . . . . . . . . . . . . . 26
11.7 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . 26
11.8 Judgments. . . . . . . . . . . . . . . . . . . . . . . 26
11.9 Change in Control. . . . . . . . . . . . . . . . . . . 26
11.10 Material Adverse Event . . . . . . . . . . . . . . . . 27
12. REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . 27
12.1 UCC and Offset Rights. . . . . . . . . . . . . . . . . 27
12.2 Additional Remedies. . . . . . . . . . . . . . . . . . 27
12.3 Attorney-in-Fact . . . . . . . . . . . . . . . . . . . 27
12.4 No Marshaling. . . . . . . . . . . . . . . . . . . . . 28
12.5 Application of Proceeds. . . . . . . . . . . . . . . . 28
12.6 No Waiver. . . . . . . . . . . . . . . . . . . . . . . 28
ii
TABLE OF CONTENTS
(continued)
Page
13. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 28
13.1 Obligations Absolute . . . . . . . . . . . . . . . . . 28
13.2 Entire Agreement . . . . . . . . . . . . . . . . . . . 28
13.3 Amendments; Waivers. . . . . . . . . . . . . . . . . . 29
13.4 Waiver of Defenses . . . . . . . . . . . . . . . . . . 29
13.5 Waiver of Jury Trial . . . . . . . . . . . . . . . . . 29
13.6 Litigation . . . . . . . . . . . . . . . . . . . . . . 29
13.7 Assignability. . . . . . . . . . . . . . . . . . . . . 29
13.8 Confidentiality. . . . . . . . . . . . . . . . . . . . 29
13.9 Binding Effect . . . . . . . . . . . . . . . . . . . . 30
13.10 Governing Law. . . . . . . . . . . . . . . . . . . . . 30
13.11 Enforceability . . . . . . . . . . . . . . . . . . . . 30
13.12 Survival of Borrower Representations . . . . . . . . . 30
13.13 Extensions of the Bank's Commitment and Note . . . . . 30
13.14 Time of Essence. . . . . . . . . . . . . . . . . . . . 30
13.15 Counterparts . . . . . . . . . . . . . . . . . . . . . 30
13.16 Facsimile Signatures . . . . . . . . . . . . . . . . . 30
13.17 Notices. . . . . . . . . . . . . . . . . . . . . . . . 30
13.18 Costs, Fees and Expenses Related to Agreement
and Other Agreements . . . . . . . . . . . . . . . . . 31
13.19 Indemnification. . . . . . . . . . . . . . . . . . . . 32
13.20 Patriot Act, Bank Secrecy Act and Office of
Foreign Assets Control . . . . . . . . . . . . . . . . 32
Exhibits
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Exhibit A - Revolving Note
Exhibit B - Form of Compliance Certificate
iii
LOAN AGREEMENT
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This LOAN AGREEMENT dated as of October 5, 2007 (the "Agreement"), is
executed by and between ▇▇▇▇▇▇▇▇, INC., a Delaware corporation
("Borrower"), with a chief executive office located at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and U.S. BANK NATIONAL ASSOCIATION, a national
banking association (the "Bank"), located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, Borrower desires that the Bank extend certain working
capital facilities to Borrower and to provide funds for other general
business purposes of Borrower in accordance with this Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants and agreements set forth herein, Borrower agrees to borrow from
the Bank, and the Bank agrees to lend to Borrower, subject to and upon the
following terms and conditions:
1. DEFINITIONS.
1.1 DEFINED TERMS. For the purposes of this Agreement, the
following capitalized words and phrases shall have the meanings set forth
below.
"Acquisition" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of
all or substantially all of any business or division of a Person, (b) the
acquisition of in excess of 50% of the Capital Securities of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than a
Person that is already a Subsidiary).
"Affiliate" means any Person (a) that directly or indirectly, through
one or more intermediaries, controls or is controlled by, or is under
common control with Borrower or one or more Affiliates, (b) that directly
or beneficially owns or holds 10% or more of any equity interest in
Borrower or one or more Affiliates or (c) 10% of more of whose voting stock
(or in the case of a Person which is not a corporation, 10% or more of any
equity interest) is owned directly or beneficially or held by Borrower or
one or more Affiliates. For purposes of this definition and this
Agreement, the term "control" shall mean, directly or indirectly, the power
to direct or cause the direction of the management or policies of a Person,
whether through ownership interest or otherwise, including without
limitation the power to elect or appoint, directly or indirectly, a
majority of the members of its governing board or body.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, as
now existing or hereafter amended.
"Capital Expenditures" shall mean expenditures (including Capital
Lease obligations which should be capitalized under GAAP) for the
acquisition of fixed assets which are required to be capitalized under
GAAP.
"Capital Lease" shall mean, as to any Person, a lease of any interest
in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, by such Person as lessee that is, or should be, in
accordance with Financial Accounting Standards Board ("FASB") Statement
No. 13, as amended from time to time, or, if such statement is not then in
effect, such statement of GAAP as may be applicable, recorded as a "capital
lease" on the balance sheet of Borrower prepared in accordance with GAAP.
1
"Capital Securities" means, with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued or acquired after the Closing Date, including common shares,
preferred shares, membership interests in a limited liability company,
limited or general partnership interests in a partnership, interests in a
trust, interests in other unincorporated organizations or any other
equivalent of such ownership interest.
"Closing Date" shall mean October 5, 2007.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Contingent Liability" and "Contingent Liabilities" shall mean,
without duplication, respectively, each obligation and liability of
Borrower and all such obligations and liabilities of Borrower incurred
pursuant to any agreement, undertaking or arrangement by which Borrower:
(a) guarantees, endorses or otherwise becomes or is contingently liable
upon (by direct or indirect agreement, contingent or otherwise, to provide
funds for payment, to supply funds to, or otherwise to invest in, a debtor,
or otherwise to assure a creditor against loss) the indebtedness, dividend,
obligation or other liability of any other Person in any manner (other than
by endorsement of instruments in the course of collection), including
without limitation, any indebtedness, dividend or other obligation which
may be issued or incurred at some future time; (b) guarantees the payment
of dividends or other distributions upon the shares or ownership interest
of any other Person; (c) undertakes or agrees (whether contingently or
otherwise) (i) to purchase, repurchase, or otherwise acquire any
indebtedness, obligation or liability of any other Person or any property
or assets constituting security therefor, (ii) to advance or provide funds
for the payment or discharge of any indebtedness, obligation or liability
of any other Person (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain solvency,
assets, level of income, working capital or other financial condition of
any other Person or (iii) to make payment to any other Person other than
for value received; (d) agrees to lease property or to purchase securities,
property or services from such other Person with the purpose or intent of
assuring the owner of such indebtedness or obligation of the ability of
such other Person to make payment of the indebtedness or obligation; (e) to
induce the issuance of, or in connection with the issuance of, any letter
of credit for the benefit of such other Person; or (f) undertakes or agrees
otherwise to assure a creditor against loss. The amount of any Contingent
Liability shall (subject to any limitation set forth herein) be deemed to
be the outstanding principal amount (or maximum permitted principal amount,
if larger) of the indebtedness, obligation or other liability guaranteed or
supported thereby.
"Default Rate" shall mean a per annum rate of interest equal to the
Prime Rate plus two percent (2%) per annum.
"Depreciation" shall mean the total amounts added to depreciation,
amortization, obsolescence, valuation and other proper reserves, as
reflected on Borrower's consolidated financial statement and determined in
accordance with GAAP.
"EBITDA" shall mean, for any period, (a) the sum for such period of:
(i) consolidated net income, PLUS (ii) Interest Expense, PLUS (iii) federal
and state income taxes as determined in accordance with GAAP, PLUS (iv) all
amounts treated as expenses for Depreciation, PLUS (v) all extraordinary or
non-recurring losses and other non-cash charges, MINUS (b) any items of
gain which are extraordinary items as defined by GAAP, including, without
limitation, that portion of net income arising out of the sale of assets
outside of the ordinary course of business.
2
"Employee Plan" includes any pension, stock bonus, employee stock
ownership plan, retirement, disability, medical, dental or other health
plan, life insurance or other death benefit plan, profit sharing, deferred
compensation, stock option, bonus or other incentive plan, vacation benefit
plan, severance plan or other employee benefit plan or arrangement,
including, without limitation, those pension, profit-sharing and retirement
plans of Borrower described from time to time in the financial statements
of Borrower and any pension plan, welfare plan, Defined Benefit Pension
Plans (as defined in ERISA) or any multi-employer plan, maintained or
administered by Borrower or to which Borrower is a party or may have any
liability or by which Borrower is bound.
"Environmental Laws" shall mean all federal, state, district, local
and foreign laws, rules, regulations, ordinances, and consent decrees
relating to health, safety, hazardous substances, pollution and
environmental matters, as now or at any time hereafter during the term
hereof in effect, applicable to Borrower's business or facilities owned or
operated by Borrower, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contamination, chemicals, or
hazardous, toxic or dangerous substances, materials or wastes in the
environment (including, without limitation, ambient air, surface water,
land surface or subsurface strata) or otherwise relating to the generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Event of Default" shall mean any of the events or conditions set
forth in SECTION 11 hereof.
"Exchange Act" shall mean the Securities and Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
"Funded Debt" means, at any time, for any Person, determined for such
Person and its Subsidiaries on a consolidated basis and in accordance with
GAAP, the sum of the following, without duplication: (i) Indebtedness for
borrowed money, (ii) obligations under Capital Leases, and (iii) purchase
money Indebtedness.
"GAAP" shall mean generally accepted accounting principles, using the
accrual basis of accounting and consistently applied with prior periods;
provided, however, that GAAP with respect to any interim financial
statements or reports shall be deemed subject to fiscal year-end
adjustments and footnotes made in accordance with GAAP.
"General Intangibles" means all choses in action, causes of action
and all other intangible property of Borrower of every kind and nature now
owned or hereafter acquired by Borrower, including, without limitation,
corporate and other business records, inventions, designs, patents, patent
and trademark registrations and applications, trademarks, trade names,
trade secrets, Goodwill, copyrights, registrations, licenses, franchises,
deferred tax benefits, tax refund claims, prepaid expenses, computer
programs, covenants not to compete, customer lists and mailing lists,
contract rights, indemnification rights, causes of action and any letters
of credit, guarantee claims, security interests or other security held by
or granted to Borrower.
"Goodwill" shall mean all goodwill reflected on the financial
statements of Borrower as determined in accordance with GAAP.
3
"Hazardous Materials" shall mean any hazardous, toxic or dangerous
substance, materials and wastes, including, without limitation,
hydrocarbons (including naturally occurring or man-made petroleum and
hydrocarbons), flammable explosives, asbestos, urea formaldehyde
insulation, radioactive materials, biological substances, polychlorinated
biphenyls, pesticides, herbicides and any other kind and/or type of
pollutants or contaminants (including, without limitation, materials which
include hazardous constituents), sewage, sludge, industrial slag, solvents
and/or any other similar substances, materials or wastes that are or become
regulated under any Environmental Law (including, without limitation, any
that are or become classified as hazardous or toxic under any Environmental
Law).
"Indebtedness" shall mean at any time (a) all Liabilities of
Borrower, (b) all Capital Lease obligations of Borrower, (c) all other
debt, secured or unsecured, created, issued, incurred or assumed by
Borrower for money borrowed or for the deferred purchase price of any fixed
or capital asset, (d) indebtedness secured by any Lien existing on property
owned by Borrower whether or not the Indebtedness secured thereby has been
assumed, and (e) all Contingent Liabilities of Borrower whether or not
reflected on its balance sheet.
"Indemnified Party" and "Indemnified Parties" shall mean,
respectively, each of the Bank and any parent corporations, affiliated
corporations or subsidiaries of the Bank, and each of their respective
officers, directors, employees, attorneys and agents, and all of such
parties and entities.
"Interest Expense" shall mean, for any period, the sum of: (a) all
interest, charges and related expenses payable with respect to that fiscal
period to a lender in connection with borrowed money or the deferred
purchase price of assets that are treated as interest in accordance with
GAAP, PLUS (b) the portion of rent payable with respect to that fiscal
period under Capital Leases that should be treated as interest in
accordance with GAAP, PLUS (c) all charges paid or payable (without
duplication) during that period with respect to any Interest Rate
Agreements.
"Interest Rate" means Borrower's option from time to time of (i) the
Prime Rate MINUS 0.50% or (ii) the LIBOR Rate PLUS 1.00%.
"Interest Rate Agreements" shall mean any interest rate protection
agreement, interest rate swap or other interest rate hedge arrangement
(other than any interest rate cap or other similar agreement or arrangement
pursuant to which Borrower has no credit exposure to the Bank) to or under
which Borrower or any Subsidiary of Borrower is a party or beneficiary.
"Letter of Credit" and "Letters of Credit" shall mean, respectively,
a letter of credit and all such letters of credit issued by the Bank, in
its sole discretion, upon the execution and delivery by Borrower and the
acceptance by the Bank of a reimbursement agreement and an application for
Letter of Credit, as set forth in SECTION 2.4 of this Agreement.
"Letter of Credit Obligations" shall mean, at any time, an amount
equal to the aggregate of the original face amounts of all Letters of
Credit minus the sum of (i) the amount of any reductions in the original
face amount of any Letter of Credit which did not result from a draw
thereunder, (ii) the amount of any payments made by the Bank with respect
to any draws made under a Letter of Credit for which Borrower has
reimbursed the Bank, (iii) the amount of any payments made by the Bank with
respect to any draws made under a Letter of Credit which have been
converted to a Revolving Loan as set forth in SECTION 2.4 and (iv) the
portion of any issued but expired Letter of Credit which has not been drawn
by the beneficiary thereunder. For purposes of determining the outstanding
Letter of Credit Obligations at any time, the Bank's acceptance of a draft
drawn on the Bank pursuant to a Letter of Credit shall constitute a draw on
the applicable Letter of Credit at the time of such acceptance.
4
"Liabilities" shall mean at all times all liabilities of Borrower
that would be shown as such on the balance sheet of Borrower prepared in
accordance with GAAP.
"LIBOR" shall mean a rate of interest equal to the per annum rate of
interest at which United States dollar deposits in an amount comparable to
the amount of the relevant LIBOR Loan and for a period equal to the
relevant Loan Period are offered generally to the Bank (rounded upward if
necessary, to the nearest 1/100 of 1.00%) in the London Interbank
Eurodollar market at 11:00 a.m. (London time) two New York Banking Days
prior to the commencement of each Loan Period LESS the maximum reserve
percentages for determining reserves to be maintained by member banks of
the Federal Reserve System for Eurocurrency liabilities, or as LIBOR is
otherwise determined by the Bank in its sole and absolute discretion, such
rate to remain fixed for such Loan Period. The Bank's determination of
LIBOR shall be conclusive, absent manifest error.
"LIBOR Loan" or "LIBOR Loans" shall mean that portion, and
collectively those portions, of the aggregate outstanding principal balance
of the Revolving Loans that will bear interest at the LIBOR Rate, of which
at any time and from time to time, Borrower may identify no more than
five (5) advances of the Revolving Loans which will bear interest at the
LIBOR Rate, of which each particular LIBOR Loan must be in the amount of
Two Hundred Fifty Thousand Dollars ($250,000.00) or a higher integral
multiple of One Hundred Thousand Dollars ($100,000.00).
"LIBOR Rate" shall mean a per-annum rate of interest equal to LIBOR
for the relevant Loan Period quoted by Bank from Reuters Screen LIBORO1
Page or any successor thereto (which shall be the LIBOR rate in effect
two (2) New York Banking Days prior to commencement of the advance),
adjusted for any reserve requirement and any subsequent costs arising from
a change in government regulation, which LIBOR Rate shall remain fixed
during such Loan Period.
"Lien" shall mean any mortgage, pledge, hypothecation, judgment lien
or similar legal process, title retention lien, or other lien or security
interest, including, without limitation, the interest of a vendor under any
conditional sale or other title retention agreement and the interest of a
lessor under a lease of any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible, by such Person
as lessee that is, or should be, a Capital Lease on the balance sheet of
Borrower prepared in accordance with GAAP.
"Loans" shall mean, collectively, all Revolving Loans (whether Prime
Loans or LIBOR Loans) made by the Bank to Borrower and all Letter of Credit
Obligations, under and pursuant to this Agreement.
"Loan Documents" shall have the meaning set forth in SECTION 3.1.
"Loan Period" shall mean the period commencing on the advance date of
the applicable LIBOR Rate Loan and ending on the numerically corresponding
day 1, 2 or 6 months thereafter matching the interest rate term selected by
Borrower; provided, however, (a) if any Loan Period would otherwise end on
a day which is not a New York Banking Day, then the Loan Period shall end
on the next succeeding New York Banking Day unless the next succeeding New
York Banking Day falls in another calendar month, in which case the Loan
Period shall end on the immediately preceding New York Banking Day; or
(b) if any Loan Period begins on the last New York Banking Day of a
calendar month (or on the day for which there is no numerically
corresponding day in the calendar month at the end of the Loan Period),
then the Loan Period shall end on the last New York Banking Day of the
calendar month at the end of such Loan Period.
"Mandatory Prepayment" shall have the meaning set forth in
SECTION 2.1(c).
5
"Material Adverse Effect" means (a) a material adverse change in, or
a material adverse effect upon, the results of operations, business,
assets, or the financial condition of Borrower; (b) a material impairment
of the ability of Borrower to perform its obligations under the Loan
Documents; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability of any Loan Document.
"Maturity Date" shall mean October 31, 2009 in the case of all
Revolving Loans, unless extended by the Bank pursuant to any modification,
extension or renewal note executed by Borrower and accepted by the Bank in
its sole and absolute discretion in substitution for the applicable Note.
"Maximum Letter of Credit Obligation" shall mean the lesser of
(a) the amount of the Revolving Loan Commitment less the aggregate amount
of all Loans (including, but not limited to, Letter of Credit Obligations)
outstanding at any time and (b) Fifteen Million Dollars ($15,000,000).
"Net Worth" shall mean, as of any date of determination, total assets
LESS total Liabilities, as determined in accordance with GAAP.
"New York Banking Day" shall mean any day (other than a Saturday or
Sunday) on which commercial banks are open for business in New York, New
York.
"Note" shall mean the Revolving Note.
"Obligations" shall mean the Loans, as evidenced by the Note, all
interest accrued thereon, any fees due the Bank hereunder, any expenses
incurred by the Bank hereunder and any and all other liabilities and
obligations of Borrower to the Bank and its Affiliates, howsoever created,
arising or evidenced, and howsoever owned, held or acquired, whether now or
hereafter existing, whether now due or to become due, direct or indirect,
absolute or contingent, and whether several, joint or joint and several,
including, but not limited to, any Interest Rate Agreements, or obligations
arising under the other Loan Documents.
"Obligor" shall mean Borrower, any accommodation endorser, third
party pledgor, or any other party liable with respect to the Obligations.
"Organizational Identification Number" means, with respect to
Borrower, the organizational identification number assigned to Borrower by
the applicable governmental unit or agency of the jurisdiction of
organization for Borrower.
"Person" shall mean any natural person, individual, partnership,
limited liability company, corporation, trust, joint venture, joint stock
company, association, unincorporated organization, government or agency or
political subdivision thereof, or other entity.
"Prime Loan" or "Prime Loans" shall mean that portion, and
collectively, those portions of the aggregate outstanding principal balance
of the Loans that will bear interest at the Prime Rate.
"Prime Rate" shall mean the floating per annum rate of interest which
at any time, and from time to time, shall be most recently announced by the
Bank as its Prime Rate, which is not intended to be the Bank's lowest or
most favorable rate of interest at any one time. The effective date of any
change in the Prime Rate shall for purposes hereof be the date the Prime
Rate is changed by the Bank.
"Regulatory Change" shall mean the introduction of, or any change in
any applicable law, treaty, rule, regulation or guideline or in the
interpretation or administration thereof by any governmental authority or
any central bank or other fiscal, monetary or other authority having
jurisdiction over the Bank or its lending office.
6
"Revolving Loan" and "Revolving Loans" shall mean, respectively, each
direct advance and the aggregate of all such direct advances, from time to
time in the form of either Prime Loans and/or LIBOR Loans, made by the Bank
to Borrower under and pursuant to this Agreement, as set forth in
SECTION 2.1 of this Agreement.
"Revolving Loan Availability" shall mean at any time, the Revolving
Loan Commitment LESS all outstanding Revolving Loans and Letters of Credit.
"Revolving Loan Commitment" shall mean Fifteen Million Dollars
($15,000,000).
"Revolving Note" shall have the meaning set forth in SECTION 4.1
hereof.
"Subordinated Debt" shall mean that portion of the Liabilities of
Borrower which are subordinated to the Obligations in a manner satisfactory
to the Bank in its sole discretion, including, but not limited to, right
and time of payment of principal and interest.
"Subsidiary" and "Subsidiaries" shall mean, respectively, each and
all such corporations, partnerships, limited partnerships, limited
liability companies, limited liability partnerships or other entities of
which or in which Borrower owns directly or indirectly fifty percent
(50.00%) or more of (i) the combined voting power of all classes of stock
having general voting power under ordinary circumstances to elect a
majority of the board of directors of such entity if a corporation,
(ii) the management authority and capital interest or profits interest of
such entity, if a partnership, limited partnership, limited liability
company, limited liability partnership, joint venture or similar entity, or
(iii) the beneficial interest of such entity, if a trust, association or
other unincorporated organization.
"Tangible Net Worth" means, at any time, Net Worth PLUS Subordinated
Debt LESS the amount of any General Intangibles and amounts due from
Affiliates.
"Type of Organization" means, with respect to Borrower, the kind or
type of entity of Borrower, such as a corporation or limited liability
company.
"UCC" shall mean the Uniform Commercial Code in effect in the State
of Illinois from time to time.
"Wholly-Owned Subsidiary" shall mean any Subsidiary of which or in
which Borrower owns directly or indirectly 100% of (i) the combined voting
power of all classes of stock having general voting power under ordinary
circumstances to elect a majority of the board of directors of such Person,
if it is a corporation, (ii) the capital interest or profits interest of
such Persons, if it is a partnership, joint venture or similar entity or
(iii) the beneficial interest of such Persons, if it is a trust,
association or other unincorporated organization.
7
1.2 ACCOUNTING TERMS. Any accounting terms used in this Agreement
which are not specifically defined herein shall have the meanings
customarily given them in accordance with GAAP. Calculations and
determinations of financial and accounting terms used and not otherwise
specifically defined hereunder and the preparation of financial statements
to be furnished to the Bank pursuant hereto shall be made and prepared,
both as to classification of items and as to amount, in accordance with
GAAP as used in the preparation of the financial statements of Borrower on
the date of this Agreement. If any changes in accounting principles or
practices from those used in the preparation of the financial statements
are hereafter occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants
(or any successor thereto or agencies with similar functions), which
results in a material change in the method of accounting in the financial
statements required to be furnished to the Bank hereunder or in the
calculation of financial covenants, standards or terms contained in this
Agreement, the parties hereto agree to enter into good faith negotiations
to amend such provisions so as equitably to reflect such changes to the end
that the criteria for evaluating the financial condition and performance of
Borrower will be the same after such changes as they were before such
changes; and, if the parties fail to agree on the amendment of such
provisions, Borrower will furnish financial statements in accordance with
such changes but shall provide calculations for all financial covenants,
perform all financial covenants and otherwise observe all financial
standards and terms in accordance with applicable accounting principles and
practices in effect immediately prior to such changes. Calculations with
respect to financial covenants required to be stated in accordance with
applicable accounting principles and practices in effect immediately prior
to such changes shall be reviewed and certified by Borrower's accountants.
1.3 OTHER TERMS DEFINED IN UCC. All other capitalized words and
phrases used herein and not otherwise specifically defined shall have the
respective meanings assigned to such terms in the UCC, as amended from time
to time, to the extent the same are used or defined therein.
1.4 OTHER DEFINITIONAL PROVISIONS; CONSTRUCTION. Whenever the
context so requires, the neuter gender includes the masculine and feminine,
the single number includes the plural, and vice versa, and in particular
the word "Borrower" shall be so construed. The words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and references to Article, Section,
Subsection, Annex, Schedule, Exhibit and like references are references to
this Agreement unless otherwise specified. An Event of Default shall
"continue" or be "continuing" until such Event of Default has been waived
in accordance with SECTION 13.3 hereof. References in this Agreement to
any party shall include such party's successors and permitted assigns.
References to any "Section" shall be a reference to such Section of this
Agreement unless otherwise stated. To the extent any of the provisions of
the other Loan Documents are inconsistent with the terms of this Loan
Agreement, the provisions of this Loan Agreement shall govern.
8
2. COMMITMENT OF THE BANK.
2.1 REVOLVING LOANS.
(a) REVOLVING LOAN COMMITMENT. Subject to the terms and
conditions of this Agreement and the other Loan Documents, and in reliance
upon the representations and warranties of Borrower set forth herein and in
the other Loan Documents, the Bank agrees to make such Revolving Loans at
such times as Borrower may from time to time request until, but not
including, the Maturity Date, and in such amounts as Borrower may from time
to time request; PROVIDED, however, that the aggregate principal balance of
all Revolving Loans and all Letter of Credit Obligations outstanding at any
time shall not exceed the Revolving Loan Commitment. Revolving Loans made
by the Bank may be repaid and, subject to the terms and conditions hereof,
borrowed again up to, but not including the Maturity Date unless the
Revolving Loans are otherwise terminated or extended as provided in this
Agreement. The Revolving Loans shall be used by Borrower for working
capital purposes.
(b) REVOLVING LOAN INTEREST AND PAYMENTS. Except as
otherwise provided in this SECTION 2.1(b), the principal amount of the
Revolving Loans outstanding from time to time shall bear interest at the
Interest Rate. Accrued and unpaid interest on the unpaid principal balance
of all Revolving Loans outstanding from time to time which are Prime Loans,
shall be due and payable monthly, in arrears, commencing on October 31,
2007 and continuing on the last day of each calendar month thereafter, and
on the Maturity Date; provided, however, for any Loan Period in excess of
three (3) months, such interest will be payable on the last day of each
three (3) month interval. Accrued and unpaid interest on the unpaid
principal balance of all Revolving Loans outstanding from time to time
which are LIBOR Loans shall be payable on the last New York Banking Day of
each Loan Period, commencing on the first such date to occur after the date
hereof, on the date of any principal repayment of a LIBOR Loan and on the
Maturity Date. Any amount of principal or interest on the Revolving Loans
which is not paid when due, whether at stated maturity, by acceleration or
otherwise, shall bear interest payable on demand at the Default Rate.
(c) REVOLVING LOAN PRINCIPAL REPAYMENTS.
(i) MANDATORY PREPAYMENTS. All Revolving Loans hereunder
shall be repaid by Borrower on the Maturity Date, unless payable
sooner pursuant to the provisions of this Agreement. In the event
the aggregate outstanding principal balance of all Revolving Loans
and Letter of Credit Obligations hereunder exceeds the Revolving Loan
Commitment, Borrower shall, without notice or demand of any kind,
immediately make such repayments of the Revolving Loans or take such
other actions as shall be necessary to eliminate such excess. Also,
if Borrower chooses not to convert any Revolving Loan which is a
LIBOR Loan to a Prime Loan as provided in SECTION 2.2(b) and
SECTION 2.2(c), then such Revolving Loan shall be immediately due and
payable on the last New York Banking Day of the then-existing Loan
Period or on such earlier date as required by law, all without
further demand, presentment, protest or notice of any kind, all of
which are hereby waived by Borrower (each a "Mandatory Prepayment").
(ii) OPTIONAL PREPAYMENTS. Borrower may from time to time
prepay the Revolving Loans which are Prime Loans, in whole or in
part, without any prepayment penalty whatsoever, provided, however,
that any prepayment of the entire principal balance of the Prime
Loans shall include accrued interest on such Prime Loans to the date
of such prepayment and payment in full of all other Obligations
(other than the LIBOR Loans), then due and payable.
9
2.2 ADDITIONAL LIBOR LOAN PROVISIONS.
(a) LIBOR LOAN PREPAYMENTS. Notwithstanding anything to the
contrary contained herein, the principal balance of any LIBOR Loan may not
be prepaid in whole or in part at any time. If for any reason a LIBOR Loan
is prepaid prior to the last New York Banking Day of the Loan Period,
whether voluntarily or because prepayment is required due to this Note
maturing or due to acceleration of the Obligations upon default or
otherwise, Borrower agrees to pay all of Bank's costs, expenses and
Interest Differential (as defined below) incurred as a result of such
prepayment. For purposes herein, the term "Interest Differential" shall
mean that sum as determined by the Bank equal to the greater of zero or the
financial loss incurred by Bank resulting from prepayment, calculated as
the difference between the amount of interest Bank would have earned (from
like investments in the money markets as of the first day of the LIBOR
Loan) had prepayment not occurred and the interest Bank will actually earn
(from like investments in the money markets as of the date of prepayment)
as a result of the redeployment of funds from the prepayment. Because of
the short-term nature of this facility, Borrower agrees that the Interest
Differential shall not be discounted to its present value. Any prepayment
of a LIBOR Loan shall be in an amount equal to the remaining entire
principal balance of such loan.
(b) LIBOR UNAVAILABILITY. If the Bank determines (which
determination shall be conclusive, absent manifest error) prior to the
commencement of any Loan Period that (i) United States dollar deposits of
sufficient amount and maturity for funding any LIBOR Loan are not available
to the Bank in the London Interbank Eurodollar market in the ordinary
course of business or (ii) by reason of circumstances affecting the London
Interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the rate of interest to be applicable to the relevant LIBOR
Loan, the Bank shall promptly notify Borrower thereof and, so long as the
foregoing conditions continue, Revolving Loans may not be advanced as a
LIBOR Loan thereafter. In addition, at Borrower's option, each existing
LIBOR Loan shall be immediately (i) converted to a Prime Loan on the last
New York Banking Day of the then existing Loan Period or (ii) due and
payable on the last New York Banking Day of the then existing Loan Period,
without further demand, presentment, protest or notice of any kind, all of
which are hereby waived by Borrower.
(c) REGULATORY CHANGE. In addition, if, after the date
hereof, a Regulatory Change shall, in the reasonable determination of the
Bank, make it unlawful for the Bank to make or maintain the LIBOR Loans,
then the Bank shall promptly notify Borrower and Revolving Loans may not be
advanced as LIBOR Loans thereafter. In addition, at Borrower's option,
each existing LIBOR Loan shall be immediately (i) converted to a Prime Loan
on the last New York Banking Day of the then existing Loan Period or on
such earlier date as required by law or (ii) due and payable on the last
New York Banking Day of the then existing Loan Period or on such earlier
date as required by law, all without further demand, presentment, protest
or notice of any kind, all of which are hereby waived by Borrower.
(d) LIBOR LOAN INDEMNITY. If any Regulatory Change (whether
or not having the force of law) shall (a) impose, modify or deem applicable
any assessment, reserve, special deposit or similar requirement against
assets held by, or deposits in or for the account of or loans by, or any
other acquisition of funds or disbursements by, the Bank; (b) subject the
Bank or any LIBOR Loan to any tax, duty, charge, stamp tax or fee or change
the basis of taxation of payments to the Bank of principal or interest due
from Borrower to the Bank hereunder (other than a change in the taxation of
the overall net income of the Bank); or (c) impose on the Bank any other
condition regarding such LIBOR Loan or the Bank's funding thereof, and the
Bank shall determine (which determination shall be conclusive, absent
manifest error) that the result of the foregoing is to increase the cost to
the Bank of making or maintaining such LIBOR Loan or to reduce the amount
of principal or interest received by the Bank hereunder, then Borrower
shall pay to the Bank, on demand, such additional amounts as the Bank
shall, from time to time, determine are sufficient to compensate and
indemnify the Bank for such increased cost or reduced amount.
10
2.3 INTEREST AND FEE COMPUTATION; COLLECTION OF FUNDS. Except as
otherwise set forth herein, all interest and fees shall be calculated on
the basis of a year consisting of 360 days and shall be paid for the actual
number of days elapsed. Principal payments submitted in funds not
immediately available shall continue to bear interest until collected. If
any payment to be made by Borrower hereunder or under the Notes shall
become due on a day other than a New York Banking Day, such payment shall
be made on the next succeeding New York Banking Day and such extension of
time shall be included in computing any interest in respect of such
payment.
2.4 LETTERS OF CREDIT. Subject to the terms and conditions of this
Agreement and upon the execution and delivery by Borrower of a
reimbursement agreement in form and substance reasonably acceptable to the
Bank and, upon the execution and delivery by Borrower, and the acceptance
by the Bank, in its reasonable discretion, of an application for letter of
credit, the Bank agrees to issue for the account of Borrower out of the
Revolving Loan Availability, such Letters of Credit in the standard form of
the Bank and otherwise in form and substance acceptable to the Bank, from
time to time during the term of this Agreement; provided, that the Letter
of Credit Obligations may not at any time exceed the Maximum Letter of
Credit Obligation; and, provided, further, that no Letter of Credit shall
have an expiration date later than the Maturity Date for Revolving Loans;
provided, however, that the Bank may elect, in its sole discretion, to
issue Letters of Credit with expiration dates up to one year beyond the
Maturity Date for Revolving Loans so long as Borrower complies with the
provisions of SECTION 2.5 below. The amount of any payments made by the
Bank with respect to draws made by a beneficiary under a Letter of Credit
for which Borrower has failed to reimburse the Bank, shall be deemed to
have been converted to a Revolving Loan (as a Prime Rate Loan) as of the
date such payment was made by the Bank to such beneficiary. Upon the
occurrence of an Event of Default and at the option of the Bank, all Letter
of Credit Obligations shall be converted to Prime Loans, all without
demand, presentment, protest or notice of any kind, all of which are hereby
waived by Borrower.
2.5 LETTER OF CREDIT COLLATERAL ACCOUNT.
(a) Upon the occurrence and during the continuance of an
Event of Default, Borrower hereby agrees that it will, until the final
expiration date of any Letter of Credit and thereafter as long as any
amount is payable to the Bank in respect of any Letter of Credit and
whether or not this Agreement is then in effect, maintain a special
collateral account (the "Letter of Credit Collateral Account") at the
Bank's office at the address specified on the signature page hereof, in the
name of Borrower but under the sole dominion and control of the Bank and in
which Borrower shall have no interest other than as set forth below. If
this Agreement terminates for any reason and any Letter of Credit remains
outstanding beyond the Maturity Date, Borrower shall, immediately do one or
more of the following: (i) establish (if none existed) and deposit in the
Letter of Credit Collateral Account for the benefit, of the Bank, an amount
of cash equal to one hundred two percent (102%) of the sum of the aggregate
maximum amount remaining available to be drawn under the remaining
outstanding Letters of Credit (assuming compliance with all conditions for
drawing thereunder) (herein the "Collateral Amount"), (ii) deliver to the
Bank, cash equivalents in a face amount, which when discounted at the
Bank's customary advance rate for collateral of that type, is at least
equal to the Collateral Amount, plus such pledge agreements, financing
statements, control agreements and other documents requested by the Bank in
order to perfect a first and prior perfected security interest in such cash
equivalents in favor of the Bank, or (iii) provide the Bank with a
letter(s) of credit in an aggregate amount of at least equal to the
Collateral Amount, such letter(s) of credit to be in form and substance,
and issued by banks, satisfactory to the Bank. The Bank will invest any
funds on deposit from time to time in the Letter of Credit Collateral
Account in cash equivalents, as directed by Borrower from time to time.
11
(b) Upon any Event of Default hereunder, (i) the obligations
of the Bank to issue Letters of Credit shall terminate and (ii) Borrower
will be and become thereby unconditionally obligated, without the need for
demand or the necessity of any act or evidence, to deliver to the Bank, for
deposit into the Letter of Credit Collateral Account, an amount ("the
"Collateral Shortfall Amount") of cash or cash equivalents equal to the
excess, if any, of
(i) one hundred two percent (102%) of the sum of the
aggregate maximum amount remaining available to be drawn under the
Letters of Credit (assuming compliance with all conditions for
drawing thereunder) issued by the Bank and outstanding as of such
time, MINUS
(ii) the amount on deposit in the Letter of Credit Collateral
Account at such time that is free and clear of all rights and claims
of third parties and that has not been applied by the Bank against
Borrower's Obligations.
(c) Upon the occurrence and during the continuance of an
Event of Default, the Bank may at any time or from time to time after funds
are deposited in the Letter of Credit Collateral Account, apply such funds
to the payment of Borrower's Obligations as shall from time to time have
become due and payable by Borrower to the Bank under this Agreement or the
other Loan Documents. Neither Borrower nor any Person claiming on behalf
of or through Borrower shall have any right to withdraw any of the funds
held in the Letter of Credit Collateral Account. After all of Borrower's
Obligations have been indefeasibly paid in full, any funds remaining in the
Letter of Credit Collateral Account shall be returned by the Bank to
Borrower, or paid to whoever may be legally entitled thereto at such time.
The Bank shall exercise reasonable care in the custody and preservation of
any funds held in the Letter of Collateral Account and shall be deemed to
have exercised such care if such funds are accorded treatment substantially
equivalent to that which the Bank accords its own property, it being
understood that the Bank shall not have any responsibility for taking any
necessary steps to preserve rights against any Persons with respect to any
such funds.
2.6 ALL LOANS TO CONSTITUTE ONE OBLIGATION. Except as specifically
set forth herein, the Loans shall constitute one general obligation of
Borrower.
3. CONDITIONS OF BORROWING. Notwithstanding any other provision of this
Agreement, the Bank shall not be required to disburse or make all or any
portion of the Loans if any of the following conditions shall have
occurred:
3.1 LOAN DOCUMENTS. Borrower shall have failed to execute and
deliver to the Bank any of the following Loan Documents (collectively, the
"Loan Documents"), all of which must be satisfactory in form and substance
to the Bank and the Bank's counsel:
(a) LOAN AGREEMENT. This Agreement duly executed by Borrower.
(b) REVOLVING NOTE. A Revolving Note duly executed by
Borrower, in the form attached hereto as EXHIBIT "A".
(c) RESOLUTIONS. Resolutions of the board of directors
and/or shareholders, as applicable, of Borrower authorizing the execution
of this Agreement and the Loan Documents.
(d) ARTICLES OF INCORPORATION AND BYLAWS. A copy of
Borrower's Articles or Certificate of Incorporation or Formation (as
applicable), and all amendments, certified by the applicable Secretary of
State of the state of incorporation of Borrower (or equivalent) and a copy
of Borrower's By-laws or Operating Agreement, as applicable, certified by
the Secretary of Borrower (or equivalent).
12
(e) GOOD STANDING CERTIFICATES. Good Standing Certificates
(or equivalent) for Borrower from the State of incorporation and each state
in which Borrower is required to be qualified to transact business as a
foreign corporation, as well as a good standing or similar certificate from
each regulatory authority or state having jurisdiction over Borrower's
business activities.
(f) INCUMBENCY CERTIFICATES. A certificate of the Secretary
or an Assistant Secretary of Borrower certifying the names of the officer
or officers of Borrower authorized to sign this Agreement and the other
Loan Documents, together with a sample of the true signature of each such
officer.
(g) ADDITIONAL DOCUMENTS. Such other certificates, financial
statements, schedules, resolutions, opinions of counsel, notes and other
documents which are provided for hereunder or which the Bank shall require
in its reasonable discretion.
3.2 EVENT OF DEFAULT. No Event of Default, or any event which,
with notice or lapse of time, or both would constitute an Event of Default,
shall have occurred and be continuing.
3.3 ADVERSE CHANGES. No material adverse change in the financial
condition or affairs of Borrower, as determined in the Bank's sole
discretion, shall have occurred.
3.4 LITIGATION. No litigation or governmental proceeding shall
have been instituted against Borrower or any of its officers or
shareholders which in the discretion of the Bank, reasonably exercised,
could reasonably be expected to result in a Material Adverse Effect.
3.5 REPRESENTATIONS AND WARRANTIES. No representation or warranty
of Borrower contained herein or in any Loan Document shall be untrue or
incorrect as of the date of any Loan as though made on such date, except to
the extent such representation or warranty expressly relates to an earlier
date.
4. NOTES EVIDENCING LOANS.
4.1 REVOLVING NOTE. The Revolving Loans and the Letter of Credit
Obligations shall be evidenced by a single Revolving Note (together with
all renewals, extensions, modifications or substitutions thereof, the
"Revolving Note") in the form of EXHIBIT "A" attached hereto, duly executed
by Borrower and payable to the order of the Bank. At the time of the
initial disbursement of a Revolving Loan and at each time any additional
Revolving Loan shall be requested hereunder or a repayment made in whole or
in part thereon, a notation thereof shall be made on the books and records
of the Bank. All amounts recorded shall be, absent demonstrable error,
conclusive and binding evidence of (i) the principal amount of the
Revolving Loans advanced hereunder and the amount of all Letter of Credit
Obligations, (ii) any unpaid interest owing on the Revolving Loans and
(iii) all amounts repaid on the Revolving Loans or the Letter of Credit
Obligations. The failure to record any such amount or any error in
recording such amounts shall not, however, limit or otherwise affect the
obligations of Borrower under the Revolving Note to repay the principal
amount of the Revolving Loans, together with all interest accruing thereon.
13
5. LOANS: MANNER OF BORROWING AND GENERAL TERMS.
5.1 BORROWING PROCEDURES. (a) Each Loan shall be made available to
Borrower upon Borrower's request from any Person whose authority to so act
has not been revoked by Borrower in writing previously received by the
Bank. Each Revolving Loan may be advanced either as a Prime Loan or a
LIBOR Loan; provided, however, that at any time and from time to time,
Borrower may identify no more than five (5) Revolving Loans which may be
LIBOR Loans. A request for a Prime Loan must be received by no later than
11:00 a.m. Chicago, Illinois time, on the day it is to be funded. A
request for a LIBOR Loan must be (i) received by no later than 11:00 a.m.
Chicago, Illinois time, two (2) New York Banking Days before the day it is
to be funded and (ii) in an amount equal to Two Hundred Fifty Thousand and
00/100 Dollars ($250,000.00) or a higher integral multiple of One Hundred
Thousand and 00/100 Dollars ($100,000.00). In the event Borrower does not
timely select another interest rate option at least two (2) New York
Banking Days before the end of the Loan Period for a LIBOR Loan, Bank may
at any time after the end of the Loan Period convert the LIBOR Loan to a
Prime Loan, but until such conversion, the funds advanced under the LIBOR
Loan shall continue to accrue interest at the same rate as the Interest
Rate in effect for the such LIBOR Loan prior to the end of the Loan Period.
The proceeds of each Prime Loan or LIBOR Loan shall be made available at
the office of the Bank by credit to the account of Borrower or by other
means requested by Borrower and acceptable to the Bank. No LIBOR Loan may
extend beyond the Maturity Date. In any event, if the Loan Period for a
LIBOR Loan should happen to extend beyond the Maturity Date, such LIBOR
Loan must be prepaid on the Maturity Date. Bank's internal records of
applicable interest rates shall be determinative in the absence of manifest
error.
(b) The Bank is authorized to rely on any written, verbal,
electronic, telephonic or telecopy loan requests which the Bank believes in
its good faith judgment to emanate from a properly authorized
representative of Borrower, whether or not that is in fact the case.
Borrower does hereby irrevocably confirm, ratify and approve all such
advances by the Bank and does hereby indemnify the Bank against losses and
expenses (including court costs, attorneys' and paralegals' fees) and shall
hold the Bank harmless with respect thereto.
5.2 LETTERS OF CREDIT. Each Letter of Credit shall be issued by
the Bank upon the execution of the Bank's standard reimbursement agreement
by Borrower and the Bank, and the execution and delivery by Borrower and
the acceptance by the Bank, in its reasonable discretion, of the Bank's
standard application for Letter of Credit and the payment by Borrower of
the Bank's fees charged in connection therewith. In addition to all other
applicable fees, charges and/or interest payable by Borrower pursuant to
such reimbursement agreement or otherwise payable in accordance with the
Bank's standard letter of credit fee schedule, all standby Letters of
Credit issued under and pursuant to this Agreement shall bear an annual fee
equal to one percent (1.00%) of the face amount of such standby Letter of
Credit (as such face amount may be reduced by draws or otherwise amended
from time to time), payable by Borrower on or before the issuance of such
Letter of Credit by the Bank and annually thereafter on the same date
unless and until (i) such Letter of Credit has expired or has been returned
to the Bank, or (ii) the Bank has paid the beneficiary thereunder the full
face amount of such Letter of Credit. All Letters of Credit other than
standby Letters of Credit shall bear such fees, costs and interest as
charged by the Bank and shall contain such other terms as set forth in the
reimbursement agreement and the Bank's standard letter of credit fee
schedule.
14
5.3 PAYMENTS TO THE BANK. That portion of Borrower's Obligations
consisting of: (a) principal payable on account of the Loans made by the
Bank to Borrower pursuant to this Agreement shall be payable by Borrower to
the Bank for account of the Bank, as provided in the Note or applicable
instrument or document in respect of the Loans; (b) costs, fees and
expenses payable pursuant to this Agreement shall be payable by Borrower to
the Bank, on demand; (c) interest payable pursuant to this Agreement shall
be payable by Borrower to the Bank as provided in SECTION 2.1(b); and
(d) the balance of Borrower's Obligations, if any, shall be payable by
Borrower to the Bank as and when provided in this Agreement or the other
Loan Documents.
5.4 AUTOMATIC DEBIT. In order to cause timely payment to be made
to the Bank of all Borrower's Obligations as and when due, Borrower hereby
authorizes and directs the Bank, at the Bank's option, to debit the amount
of such Borrower's Obligations to any ordinary deposit account of Borrower
(including, without limitation, by increasing the principal balance due
under the Revolving Loan).
5.5 CONDITIONS PRECEDENT EVENTS. Each Loan made by the Bank to
Borrower at the request of Borrower pursuant to this Agreement or the other
Loan Documents shall in any event be subject to the following conditions
precedent: (a) there shall not then exist an Event of Default or any event
or condition which with notice, lapse of time and/or the making of such
Loan would constitute an Event of Default; (b) the representations,
warranties and covenants of Borrower contained in this Agreement shall be
true and correct as of the date of such Loan with the same effect as though
made on such date; (c) all of the covenants and agreements of Borrower in
this Agreement, and all of the requirements of this Agreement with respect
to such Loan, shall have been complied with; and (d) there shall not have
occurred, since the date of this Agreement, any material adverse change in
the financial condition, results of operations, assets or businesses of
Borrower. Each borrowing by Borrower hereunder shall be deemed a
representation and warranty by Borrower that the foregoing conditions have
been fulfilled as of the date of such borrowing. The Bank shall have
received upon request a certificate signed by the President or Chief
Financial Officer of Borrower dated the date of such requested Loan
certifying satisfaction of the conditions specified in clauses (a)-(d) of
this SECTION 5.5.
5.6 OFFSET. Borrower agrees that, in addition to (and without
limitation of) any right of set-off, bankers' lien or counterclaim the Bank
may otherwise have, the Bank shall be entitled, at its option, to offset
balances held by it for account of Borrower at any of its offices, in
United States Dollars or in any other currency, against any principal of or
interest on any of the Bank's Loans, or any other amount payable to the
Bank hereunder, which is not paid when due (regardless of whether such
balances are then due to Borrower), in which case it shall promptly notify
Borrower thereof, provided that the Bank's failure to give such notice
shall not affect the validity thereof.
5.7 DISCRETIONARY DISBURSEMENTS. The Bank, in its sole and
absolute discretion, may immediately upon notice to Borrower, disburse any
or all proceeds of Loans made or available to Borrower pursuant to this
Agreement and/or the other Loan Documents to pay any fees, costs, expenses
or other amounts required to be paid by Borrower hereunder and not so paid.
All monies so disbursed shall be a part of Borrower's Obligations, payable
by Borrower on demand.
5.8 CREDIT TERMINATION DATE; CONTINUANCE OF OBLIGATIONS, ETC. This
Agreement, the Bank's obligation to loan monies to Borrower, and Borrower's
ability to borrow monies from the Bank shall be in effect until the
Maturity Date. Notwithstanding the foregoing and until such date when
Borrower's Obligations shall be paid in full, Borrower's Obligations
hereunder and under the other Loan Documents shall continue, interest shall
continue to be paid in accordance with the foregoing, and the Bank shall
retain all of its rights and remedies under this Agreement.
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6. RESERVED.
7. REPRESENTATIONS AND WARRANTIES. To induce the Bank to make the
Loans, Borrower makes the following representations and warranties to the
Bank, each of which shall be true and correct as of the date of the
execution and delivery of this Agreement and which shall survive the
execution and delivery of this Agreement:
7.1 BORROWER'S ORGANIZATION AND NAME. Borrower is a corporation
duly organized, existing and in good standing under the laws of the state
of its incorporation. Borrower has full and adequate corporate or limited
liability company power, as applicable, to carry on and conduct its
business as presently conducted. Borrower's state-issued Organizational
Identification Number is set forth on SCHEDULE 7.1. Borrower is duly
licensed or qualified in all foreign jurisdictions wherein the nature of
its activities require such qualification or licensing, unless the failure
to be so licensed or qualified could not reasonably be expected to result
in a Material Adverse Effect. The exact legal name and chief executive
office of Borrower is as set forth in the first paragraph of this
Agreement. Borrower does not currently conduct, nor has it during the last
five (5) years conducted, business under any other name or trade name.
7.2 AUTHORIZATION; VALIDITY. Borrower has full right, power and
authority to enter into this Agreement, to make the borrowings and execute
and deliver the Loan Documents as provided herein and to perform all of its
duties and obligations under this Agreement and the Loan Documents. The
execution and delivery of this Agreement and the Loan Documents will not,
nor will the observance or performance of any of the matters and things
herein or therein set forth, violate or contravene any provision of law or
of the respective articles/certificate of incorporation or bylaws of
Borrower. All necessary and appropriate corporate action has been taken on
the part of Borrower to authorize the execution and delivery of this
Agreement and the Loan Documents. This Agreement and the Loan Documents
are valid and binding agreements and contracts of Borrower in accordance
with their respective terms, subject to (i) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect affecting the enforcement of creditors' rights generally and
(ii) equitable principles (whether or not any action to enforce such
document is brought at law or in equity).
7.3 COMPLIANCE WITH LAWS. The nature and transaction of Borrower's
business and operations and the use of its properties and assets,
including, but not limited to, any real estate owned or occupied by
Borrower, do not and during the term of the Loans shall not, violate or
conflict with any applicable law, statute, ordinance, rule, regulation or
order of any kind or nature, including, without limitation, the provisions
of the Fair Labor Standards Act or any zoning, land use, building, noise
abatement, occupational health and safety or other laws, any building
permit or any condition, grant, easement, covenant, condition or
restriction, whether recorded or not, except to the extent the failure to
be in compliance therewith could not reasonably be expected to result in a
Material Adverse Effect.
7.4 ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES. Borrower
represents, warrants and agrees with the Bank that (i) Borrower has not
generated, used, stored, treated, transported, manufactured, handled,
produced or disposed of any Hazardous Materials, on or off any of the
premises of Borrower (whether or not owned by it) in any manner which at
any time violates in any material respect any Environmental Law or any
license, permit, certificate, approval or similar authorization thereunder,
(ii) the operations of Borrower comply in all material respects with all
Environmental Laws and all licenses, permits certificates, approvals and
similar authorizations thereunder, (iii) there has been no investigation,
proceeding, complaint, order, directive, claim, citation or notice by any
16
governmental authority or any other Person, nor is any pending or, to the
best of Borrower's knowledge, threatened, and Borrower shall promptly
notify the Bank upon becoming aware of any such investigation, proceeding,
complaint, order, directive, claim, citation or notice that could
reasonably result in any material loss, damage or fine, and shall take
prompt and appropriate actions to respond thereto, with respect to any non-
compliance with, or violation of, the requirements of any Environmental Law
by Borrower or the release, spill or discharge, threatened or actual, of
any Hazardous Material by Borrower or the generation, use, storage,
treatment, transportation, manufacture, handling, production or disposal of
any Hazardous Material by Borrower or any other environmental, health or
safety matter, which affects Borrower or its business, operations or
assets, (iv) to the best of Borrower's knowledge, Borrower has no material
liability, contingent or otherwise, in connection with a release, spill or
discharge, threatened or actual, of any Hazardous Materials or the
generation, use, storage, treatment, transportation, manufacture, handling,
production or disposal of any Hazardous Material, and (v) without limiting
the generality of the foregoing, Borrower shall, following a reasonable
determination by the Bank that there is any material non-compliance, or any
material environmental condition which requires any action by or on behalf
of Borrower in order to avoid any material non-compliance, with any
Environmental Law, at Borrower's sole expense, cause an independent
environmental engineer acceptable to the Bank to conduct such assessment or
tests of the relevant site as are appropriate, and prepare and deliver a
report setting forth the result of such assessment or tests, a proposed
plan for remediation and an estimate of the costs thereof.
7.5 ABSENCE OF BREACH. The execution, delivery and performance of
this Agreement, the Loan Documents and any other documents or instruments
to be executed and delivered by Borrower in connection with the Loans shall
not: (i) violate any provisions of law or any applicable regulation, order,
writ, injunction or decree of any court or governmental authority or
(ii) conflict with, be inconsistent with, or result in any breach or
default of any of the terms, covenants, conditions, or provisions of any
material indenture, mortgage, deed of trust, instrument, document,
agreement or contract of any kind to which Borrower is a party or by which
Borrower or any of its property or assets may be bound.
7.6 ASSET REPRESENTATIONS. Borrower is the sole owner of all of
its real and personal property having a value in excess of $10,000, free
from any Lien of any kind.
7.7 FINANCIAL STATEMENTS. All financial statements submitted to
the Bank have been prepared in accordance with GAAP on a basis, except as
otherwise noted therein, consistent with the previous fiscal year and
present fairly in all material respects the consolidated financial
condition of Borrower and the consolidated results of the operations for
Borrower as of such date and for the periods indicated. Since the date of
the most recent financial statement submitted by Borrower to the Bank,
there has been no material adverse change in the financial condition or in
the assets or liabilities of Borrower, or any changes except those
occurring in the ordinary course of business.
7.8 LITIGATION AND TAXES. There is no litigation, demand, charge,
claim, petition or governmental investigation or proceeding pending, or to
the best knowledge of Borrower, threatened, against Borrower, which, if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect. Borrower has duly filed all applicable federal income tax
returns and state income tax returns involving any income tax liability in
excess of $25,000 and has paid all material income taxes when due. There
is no controversy or objection pending, or to the best knowledge of
Borrower, threatened in respect of any federal or material state tax
returns of Borrower involving any income tax liability in excess of $25,000
except for any controversy being contested in good faith by appropriate
legal proceedings and for which (i) adequate reserves have been provided in
accordance with GAAP and (ii) no Lien has been filed or recorded on any
asset of Borrower or its Subsidiaries.
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7.9 EVENT OF DEFAULT. No Event of Default has occurred and is
continuing, and no event has occurred and is continuing which, with the
lapse of time, the giving of notice, or both, would constitute such an
Event of Default under this Agreement or any of the Loan Documents and
Borrower is not in default (without regard to grace or cure periods) under
any material contract or agreement to which it is a party.
7.10 ERISA OBLIGATIONS. All Employee Plans of Borrower meet the
minimum funding standards of Section 302 of ERISA where applicable, and
each such Employee Plan that is intended to be qualified within the meaning
of Section 401(a) of the Code has been determined to be so qualified by the
Internal Revenue Service or will be timely submitted for such favorable
determination. Borrower has not (i) incurred a withdrawal liability,
(ii) incurred a "Reportable Event" (as defined in Section 4043 of ERISA) or
(iii) engaged in a nonexempt "Prohibited Transaction" (as defined in
Section 406 of ERISA) which will result in a Material Adverse Effect under
(i), (ii) or (iii). Borrower has promptly paid and discharged all
obligations and liabilities arising under ERISA of a character which if
unpaid or unperformed might result in the imposition of a Lien against any
of its properties or assets.
7.11 ADVERSE CIRCUMSTANCES. No condition, circumstance, event,
agreement, document, instrument, restriction, litigation or proceeding (or
threatened litigation or proceeding or basis therefor) exists which
(a) could adversely affect the validity or priority of the Liens granted to
the Bank under the Loan Documents, if any, (b) could materially adversely
affect the ability of Borrower to perform its obligations under the Loan
Documents, (c) would constitute a default under any of the Loan Documents
or (d) would constitute such a default with the giving of notice or lapse
of time or both.
7.12 LENDING RELATIONSHIP. Borrower acknowledges and agrees that
the relationship hereby created with the Bank is and has been conducted on
an open and arm's length basis in which no fiduciary relationship exists
and that Borrower has not relied and are not relying on any such fiduciary
relationship in executing this Agreement and in consummating the Loans.
The Bank represents that it will receive the Note payable to its order as
evidence of a bank loan.
7.13 RESERVED.
7.14 COMPLIANCE WITH REGULATION U. No portion of the proceeds of
the Loans shall be used by Borrower, or any affiliates of Borrower, either
directly or indirectly, for the purpose of purchasing or carrying any
margin stock, within the meaning of Regulation U as adopted by the Board of
Governors of the Federal Reserve System.
7.15 GOVERNMENTAL REGULATION. Borrower and its Subsidiaries are
not, or after giving effect to any Loan, will not be, subject to regulation
under the Federal Power Act or the Investment Company Act of 1940 or to any
federal or state statute or regulation limiting its ability to incur
indebtedness for borrowed money.
7.16 BANK ACCOUNTS. The account numbers and locations of all
material Deposit accounts and other bank accounts of Borrower and its
Subsidiaries are set forth on SCHEDULE 7.16 attached hereto and made a part
hereof.
7.17 PLACE OF BUSINESS. The principal place of business of Borrower
and the locations of all of its material assets are set forth on
SCHEDULE 7.17 attached hereto and made a part hereof.
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7.18 COMPLETE INFORMATION. This Agreement and all financial
statements, schedules, certificates, confirmations, agreements, contracts,
and other materials submitted to the Bank in connection with or in
furtherance of this Agreement by or on behalf of Borrower fairly state in
all material respects the matters with which they purport to deal, and
neither misstate any material fact nor, separately or in the aggregate,
fail to state any material fact necessary to make the statements made not
misleading.
7.19 SOLVENCY, ETC. On the date of this Agreement, and immediately
prior to and after giving effect to the issuance of each Letter of Credit
and each borrowing hereunder and the use of the proceeds thereof,
(a) Borrower's assets will exceed its Liabilities and (b) Borrower will be
solvent, will be able to pay its debts as they mature, will own property
with fair saleable value greater than the amount required to pay its debts
and will have capital sufficient to carry on its business as then
constituted.
8. NEGATIVE COVENANTS. At all times prior to the Maturity Date and
thereafter for so long as any amounts are due or owing to the Bank
hereunder, Borrower hereby covenants as follows:
8.1 INDEBTEDNESS. Borrower shall not, either directly or
indirectly, create, assume, incur or have outstanding any Indebtedness
(including purchase money indebtedness), or become liable, whether as
endorser, guarantor, surety or otherwise, for any debt or obligation of any
other Person, except:
(a) the Obligations;
(b) endorsement for collection or deposit of any commercial
paper secured in the ordinary course of business;
(c) obligations of Borrower for taxes, assessments, municipal
or other governmental charges;
(d) obligations of Borrower for accounts payable;
(e) obligations existing on the date hereof which are
disclosed on the financial statements referred to in SECTION 7.7;
(f) purchase money indebtedness not to exceed $500,000 at any
time outstanding;
(g) Capital Leases in an aggregate amount not to exceed
$1,000,000 at any time outstanding; and
(h) Subordinated Debt subject to a subordination agreement in
form and substance acceptable to the Bank.
8.2 ENCUMBRANCES. Borrower shall not, either directly or
indirectly, grant, create, assume, incur or suffer or permit to exist any
Lien or charge of any kind or character upon any asset of Borrower, whether
owned at the date hereof or hereafter acquired except:
(a) Liens for taxes, assessments or other governmental
charges not yet due or which are being contested in good faith by
appropriate legal proceedings in such a manner as not to make the property
forfeitable;
(b) Liens or charges incidental to the conduct of Borrower's
business or the ownership of its property and assets which were not
incurred in connection with the borrowing of money or the obtaining of an
advance or credit, and which do not in the aggregate materially detract
from the value of its property or assets or materially impair the use
thereof in the operation of its business;
19
(c) Liens arising out of judgments or awards against Borrower
with respect to which they shall concurrently therewith be prosecuting a
timely appeal or proceeding for review and with respect to which it shall
have secured a stay of execution pending such appeal or proceedings for
review;
(d) pledges or deposits to secure obligations under worker's
compensation laws or similar legislation;
(e) good faith deposits in connection with lending contracts
or leases to which Borrower is a party;
(f) deposits to secure public or statutory obligations of
Borrower;
(g) Liens existing on the date hereof set forth on
SCHEDULE 8.2; and
(h) Liens granted to the Bank hereunder.
8.3 INVESTMENTS. Borrower shall not, either directly or
indirectly, make or have outstanding any new investments (whether through
purchase of stocks, obligations or otherwise) in, or loans or advances to,
any other Person, or acquire all or any substantial part of the assets,
business, stock or other evidence of beneficial ownership of any other
Person except:
(a) investments in direct obligations of the United States;
(b) investments in certificates of deposit issued by the Bank
or any bank with assets greater than One Hundred Million Dollars
($100,000,000.00);
(c) investments in Prime Commercial Paper (for purposes
hereof, Prime Commercial Paper shall mean short-term unsecured promissory
notes sold by large corporations and rated A-1/P-1 by Standard & Poor's
Ratings Group, a division of McGraw Hill, Inc., and ▇▇▇▇▇'▇ Investment
Service, Inc.); or
(d) investments in Wholly-Owned Subsidiaries, joint ventures
and other Investments in an aggregate amount not to exceed $2,000,000 at
any time following the Closing Date.
8.4 TRANSFER; MERGER. Borrower shall not, (a) be a party to any
merger or consolidation, or purchase or otherwise acquire all or
substantially all of the assets or any equity securities of any class of,
or any partnership or joint venture interest in, any other Person, or
(b) either directly or indirectly, merge, consolidate, sell, transfer,
license, lease, encumber or otherwise dispose of all or any part of its
property or business or all or any substantial part of its assets, or sell
or discount (with or without recourse) any of its Promissory Notes, Chattel
Paper, Payment Intangibles or Accounts, other than (i) transfers of the
capital stock of a Subsidiary of a Borrower from one Borrower to another,
(ii) sales of Inventory in the ordinary course of their respective
businesses, (iii) dispositions of cash equivalents, (iv) dispositions of
Equipment for cash and fair value that the board of directors (or
comparable body) of the applicable Borrower determines in good faith is no
longer used or useful in the business of the such Borrower and its
Subsidiaries if all of the following conditions are met: (a) the aggregate
market value of assets sold or otherwise disposed of (net of amounts
reinvested in replacement assets) in any fiscal year of the applicable
Borrower does not exceed $1,000,000; (b) the net cash proceeds of such
asset disposition are applied as required by SECTION 2.1(c); (c) after
giving effect to the asset disposition and the repayment of the
Indebtedness with the proceeds thereof, Borrower is in compliance on a pro
20
forma basis with the covenants set forth in ARTICLE 10 recomputed for the
most recently ended month for which information is available and is in
compliance with all other terms and conditions of this Agreement; and
(d) no Default or Event of Default then exists or would result from such
asset disposition and (v) any Acquisition by Borrower where (each a
"Permitted Acquisition"):
(A) the business or division acquired are for use, or the
Person acquired is engaged, in the businesses engaged in by Borrower on the
Closing Date;
(B) immediately before and after giving effect to such
Acquisition, no Event of Default shall exist;
(C) the aggregate consideration to be paid by Borrower
(including any Debt assumed or issued in connection therewith, the amount
thereof to be calculated in accordance with GAAP) in connection with all
Acquisitions (or any series of related Acquisitions) is no more than
$25,000,000 in the aggregate following the Closing Date;
(D) immediately after giving effect to such Acquisition,
Borrower is in pro forma compliance with all the financial ratios and
restrictions set forth in SECTION 10;
(E) in the case of the Acquisition of any Person, the board
of directors or similar governing body of such Person has approved such
Acquisition and such Acquisition is not considered to be hostile;
(F) reasonably prior to such Acquisition, the Bank shall have
received complete executed or conformed copies of each material document,
instrument and agreement to be executed in connection with such Acquisition
together with all lien search reports and lien release letters and other
documents as the Bank may require to evidence the termination of Liens on
the assets or business to be acquired;
(G) not less than ten New York Banking Days prior to such
Acquisition, the Bank shall have received an acquisition summary with
respect to the Person and/or business or division to be acquired, such
summary to include a reasonably detailed description thereof (including
financial information) and operating results (including financial
statements for the most recent 12 month period for which they are available
and as otherwise available), the terms and conditions, including economic
terms, of the proposed Acquisition, and Borrower's calculation of pro forma
EBITDA relating thereto; and
(H) if the Acquisition is structured as a merger, the
surviving entity is either Borrower or, following the merger, a domestic
wholly-owned Subsidiary which is a Borrower hereto.
Notwithstanding the foregoing, for all acquisitions involving consideration
which is less than or equal to $10,000,000, Borrower shall only be required
to deliver to Bank an officer's certificate in form and substance
reasonably acceptable to Bank at least 10 days prior to such Acquisition
certifying to items (A) through (E) above.
8.5 ISSUANCE OF STOCK. Borrower shall not, either directly or
indirectly, issue or distribute any additional capital stock or other
securities of Borrower except equity securities issued to employees of
Borrower in connection with and pursuant to Borrower's 2005 Stock Incentive
Plan and any successor plan thereto.
21
8.6 RESTRICTED PAYMENTS/DISTRIBUTIONS. Borrower shall not, either
directly or indirectly, (i) make any payment, redemption, prepayment,
defeasance or repurchase of any Subordinated Debt except as specifically
permitted by the applicable subordination agreement governing the terms of
the subordination of such Subordinated Debt, which shall be in form and
substance acceptable to the Bank, or (ii) purchase or redeem any shares of
stock, or declare or pay any dividends or similar distributions, whether in
cash or otherwise, or set aside any funds for any such purpose or make any
distribution to its shareholders; PROVIDED that the foregoing shall not
restrict or prohibit wholly-owned Subsidiaries from paying dividends or
making distributions and shall not restrict or prohibit dividends or
distributions to Borrower at such times and in such amounts as are
necessary to permit:
(a) purchases of shares of (or options to purchase shares of)
equity interests in Borrower or options therefor from employees of Borrower
upon their death, termination or retirement, so long as before and after
giving effect to any such purchase, no Event of Default shall have occurred
and be continuing; and
(b) payment by Borrower of a dividend to its stockholders, so
long as (x) before and after giving effect to any such dividend, no Event
of Default shall have occurred and be continuing.
8.7 USE OF PROCEEDS. No Borrower nor any of Borrower's
Subsidiaries or Affiliates shall use any portion of the proceeds of the
Loans, either directly or indirectly, for the purpose of purchasing any
securities underwritten by an Affiliate of the Bank.
8.8 INTENTIONALLY OMITTED.
8.9 CHANGE OF LEGAL STATUS. Borrower shall not change its name,
its Organizational Identification Number, its Type of Organization, its
jurisdiction of organization or other legal structure without at least 30
days' prior written notice.
9. AFFIRMATIVE COVENANTS. At all times prior to the Maturity Date and
thereafter for so long as any amounts are due or owing to the Bank
hereunder, Borrower hereby covenants as follows:
9.1 COMPLIANCE WITH BANK REGULATORY REQUIREMENTS. Upon demand by
the Bank, Borrower shall reimburse the Bank for the Bank's additional costs
and/or reductions in the amount of principal or interest received or
receivable by the Bank if at any time after the date of this Agreement any
law, treaty or regulation or any change in any law, treaty or regulation or
the interpretation thereof by any governmental authority charged with the
administration thereof or any central bank or other fiscal, monetary or
other authority having jurisdiction over the Bank or the Loans, whether or
not having the force of law, shall impose, modify or deem applicable any
reserve (except reserve requirements taken into account in calculating the
Interest Rate) and/or special deposit requirement against or in respect of
assets held by or deposits in or for the account of the Loans by the Bank
or impose on the Bank any other condition with respect to this Agreement or
the Loans, the result of which is to either increase the cost to the Bank
of making or maintaining the Loans or to reduce the amount of principal or
interest received or receivable by the Bank with respect to such Loans.
Said additional costs and/or reductions will be those which directly result
from the imposition of such requirement or condition on the making or
maintaining of such Loans. All Loans shall be deemed to be match funded
for the purposes of the Bank's determination in the previous sentence.
9.2 CORPORATE EXISTENCE. Borrower shall at all times preserve and
maintain its corporate existence, rights, franchises and privileges, and
shall at all times continue as a going concern in the business which
Borrower is presently conducting.
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9.3 MAINTAIN PROPERTY. Borrower shall at all times maintain,
preserve and keep its plant, properties and Equipment in good repair,
working order and condition, normal wear and tear excepted, and shall from
time to time make all needful and proper repairs, renewals, replacements,
and additions thereto so that at all times the efficiency thereof shall be
fully preserved and maintained. Borrower shall permit the Bank to examine
and inspect such plant, properties and Equipment at all reasonable times;
provided, however, that Borrower shall only be required to pay for one such
examination annually prior to the occurrence of an Event of Default.
9.4 MAINTAIN INSURANCE. Borrower shall at all times insure and
keep insured with insurance companies acceptable to the Bank, all insurable
property owned by it which is of a character usually insured by companies
similarly situated and operating like properties, against loss or damage
from fire and such other hazards or risks as are customarily insured
against by companies similarly situated and operating like properties; and
shall similarly insure employers' public and professional liability risks.
Upon request by the Bank, Borrower shall deliver to the Bank a certificate
setting forth in summary form the nature and extent of the insurance
maintained by Borrower pursuant to this SECTION 9.4.
9.5 TAX LIABILITIES. Borrower shall at all times pay and discharge
all material property and other taxes, assessments and governmental charges
upon, and all claims (including claims for labor, materials and supplies)
against Borrower or any of their properties, Equipment or Inventory, before
the same shall become delinquent and before penalties accrue thereon,
unless and to the extent that the same are being contested in good faith by
appropriate legal proceedings and are insured against or bonded over to the
satisfaction of the Bank.
9.6 ERISA LIABILITIES; EMPLOYEE PLANS. Borrower shall (i) keep in
full force and effect any and all Employee Plans which are presently in
existence or may, from time to time, come into existence under ERISA, and
not withdraw from any such Employee Plans, unless such withdrawal can be
effected or such Employee Plans can be terminated without a material
liability to such Borrower; (ii) make contributions to all of such Employee
Plans in a timely manner and in a sufficient amount to comply in all
material respects with the funding obligations of ERISA (or equivalent law
or regulation), including the minimum funding standards of Section 302 of
ERISA; (iii) comply in all material respects with the requirements of ERISA
(or equivalent law or regulation) which relate to such Employee Plans;
(iv) promptly notify the Bank upon receipt by Borrower of any notice
concerning the imposition of any material withdrawal liability or of the
institution of any proceeding or other action by the Pension Benefit
Guaranty Corporation which may result in the termination of any such
Employee Plans or the appointment of a trustee to administer such Employee
Plans; (v) promptly advise the Bank of the occurrence of any "Reportable
Event" (as defined in Section 4043 of ERISA) or "Prohibited Transaction"
(as defined in Section 406 of ERISA), with respect to any such Employee
Plans if such Reportable Event or Prohibited Transaction could result in a
material liability to the Borrower; and (vi) amend any Employee Plan that
is intended to be qualified within the meaning of Section 401(a) of the
Code to the extent necessary to keep the Employee Plan qualified, and to
cause the Employee Plan to be administered and operated in a manner that
does not cause the Employee Plan to lose its qualified status.
9.7 REPORTING REQUIREMENTS. Borrower shall at all times maintain a
standard and modern system of accounting, on the accrual basis of
accounting and in all respects in accordance with GAAP, and shall furnish
to the Bank or its authorized representatives such information regarding
the business affairs, operations and financial condition of Borrower,
including, but not limited to:
(a) within forty-five (45) days after the end of each
calendar quarter, a certificate showing compliance by Borrower with the
financial covenants set forth in SECTION 10 below in the form of EXHIBIT B
attached hereto;
23
(b) as soon as possible and in any event within ten (10) days
after the occurrence of an Event of Default or any event which, with the
giving of notice, lapse of time, or both, would constitute an Event of
Default, the statement of an authorized officer of Borrower setting forth
details of such Event of Default or event and the action which such
Borrower has taken or proposes to take to cure the same;
(c) as soon as available, notification of the filing of the
periodic Form 10-Q quarterly report or comparable successor report filed by
Borrower with the Securities and Exchange Commission ("SEC") or any
successor agency; PROVIDED, that if such report is not filed with the SEC
within forty-five (45) days after the end of each of the first three
quarterly accounting periods in each fiscal year of Borrower beginning with
the quarter ending September 30, 2007, Borrower shall immediately deliver
to Bank an internally-prepared balance sheet of Borrower and its
Subsidiaries on a consolidated basis as at the end of such quarter and the
related statements of operations and statements of cash flows of Borrower
and its Subsidiaries on a consolidated basis for such quarter and for the
portion of the fiscal year ended at the end of such quarter, setting forth
in each case in comparative form the figures for the corresponding quarter
and the corresponding portion of the previous fiscal year, all in
reasonable detail and certified (subject to normal year-end adjustments) as
to fairness of presentation, in accordance with GAAP (other than footnotes
thereto), by an Authorized Officer or Controller (if such Controller is a
corporate officer) of Borrower;
(d) as soon as available, notification of the filing of Form
10-K Annual Report or comparable successor report filed by Borrower with
the SEC or any successor agency; provided, that if such report is not filed
with the SEC within ninety (90) days after the close of each fiscal year of
Borrower, Borrower shall immediately deliver to Bank a balance sheet and
the related consolidated statements of operations and stockholders' equity
and statements of cash flows of Borrower and its Subsidiaries on a
consolidated basis as of the end of such fiscal year, fairly and accurately
presenting the financial condition of Borrower and its Subsidiaries on a
consolidated basis as at such date and the results of operations of
Borrower and its Subsidiaries for such fiscal year and setting forth in
each case in comparative form the corresponding figures for the
corresponding period of the preceding fiscal year, all in reasonable
detail, prepared in accordance with GAAP consistently applied, and audited
by Price Waterhouse Coopers LLP or such other independent certified public
accountants acceptable to Bank (the "Accountants");
(e) together with each delivery of financial statements
required by subsection (c) and (d) above, Borrower shall deliver to the
Bank a certificate of Borrower executed by the President or Chief Financial
Officer of Borrower stating whether any Event of Default, or event which,
with the passage of time or giving of notice or both, would constitute,
mature into or become such an Event of Default, currently exists and is
continuing and what activities, if any, Borrower is taking or proposing to
take with respect thereto;.
(f) immediately after notice to Borrower of the commencement
thereof, notice, in writing, of any action, suite, arbitration or other
proceeding instituted, commenced or threatened against or affecting
Borrower with an amount in controversy in excess of $1,000,000;
(g) if requested by the Bank, Borrower's federal, state and
local tax returns as soon as said returns are completed in the form said
returns will be filed with the Internal Revenue Service and any state or
local department of revenue or taxing authority; and
(h) such other information respecting the condition or
operations, financial or otherwise, of Borrower or any Affiliate as the
Bank may from time to time reasonably request.
24
No change with respect to any accounting principles of Borrower shall
be made by Borrower without giving prior notification to the Bank.
Borrower represents and warrants to the Bank that the financial statements
delivered to the Bank at or prior to the execution and delivery of this
Agreement and to be delivered at all times thereafter accurately reflect
and will accurately reflect the consolidated financial condition of
Borrower. The Bank shall have the right at all times during regular
business hours upon reasonable prior notice to inspect the books and
records of Borrower and make extracts therefrom; provided, however, that
Borrower shall only be required to pay for one visit annually prior to the
occurrence of an Event of Default. The Borrower agrees to advise the Bank
immediately of any material adverse change in the financial condition, the
operations or any other status of Borrower.
9.8 SUPPLEMENTAL FINANCIAL STATEMENTS. Borrower shall immediately
upon receipt thereof, provide to the Bank copies of interim and
supplemental reports if any, submitted to Borrower by independent
accountants in connection with any interim audit or review of the books of
Borrower.
9.9 NOTICE OF PROCEEDINGS. Borrower shall, immediately after
knowledge thereof shall have come to the attention of any officer of
Borrower, give written notice to the Bank of all threatened or pending
actions, suits, and proceedings before any court or governmental
department, commission, board or other administrative agency which may have
a material effect on the business, property or operations of Borrower.
9.10 BANKING RELATIONSHIP. Borrower hereby agrees that to the
extent Borrower fails to utilize the Bank as its primary bank of account
and depository for all receipts, disbursements, cash management and related
services, the Bank may terminate the Revolving Loan Commitment and declare
all Obligations due and payable in full upon one hundred twenty (120) days'
prior written notice to Borrower.
10. FINANCIAL COVENANTS.
10.1 TANGIBLE NET WORTH. Borrower shall maintain Tangible Net
Worth, determined at the end of each calendar quarter, in an amount not
less than the "Minimum Tangible Net Worth." For purposes herein, "Minimum
Tangible Net Worth" shall mean Twenty-Two Million Five Hundred Thousand
Dollars ($22,500,000) at all times.
10.2 FUNDED DEBT TO EBITDA. Borrower shall maintain a ratio of
Funded Debt to EBITDA (calculated on a rolling four quarter basis)
determined at the end of each calendar quarter of less than or equal to 1.0
to 1.00.
11. EVENTS OF DEFAULT.
Borrower, without notice or demand of any kind, shall be in default
under this Agreement upon the occurrence of any of the following events
(each an "Event of Default"):
11.1 NONPAYMENT OF OBLIGATIONS. Any (i) principal amount due and
owing on any Note, whether by its terms or as otherwise provided herein, is
not paid when due or (ii) interest payment or any of the other Obligations
(excluding principal payments) whether by its terms or as otherwise
provided herein, is not paid within five (5) days of when due.
11.2 MISREPRESENTATION. Any oral or written warranty,
representation, certificate or statement in this Agreement, the Loan
Documents or any other agreement with the Bank shall be false when made or
at any time.
25
11.3 NONPERFORMANCE. Any failure to perform or default in the
performance of any covenant, condition or agreement contained in this
Agreement and, if capable of being cured, such failure to perform or
default in performance continues for a period of ten (10) days after
Borrower receives notice or knowledge from any source of such failure, to
perform or default in performance, or in the Loan Documents or any other
agreement with the Bank and such failure to perform or default in
performance continues beyond any applicable grace or cure period.
11.4 DEFAULT UNDER LOAN DOCUMENTS. A default under any of the other
Loan Documents, all of which covenants, conditions and agreements contained
therein are hereby incorporated in this Agreement by express reference,
shall be and constitute an Event of Default under this Agreement and any
other of the Obligations.
11.5 DEFAULT UNDER OTHER AGREEMENTS. Any default shall occur in the
payment of principal, interest or any other sum for any other obligation in
excess of $50,000 in the aggregate beyond any period of grace provided with
respect thereto or in the performance of any other term, condition or
covenant contained in any material agreement (including, but not limited to
any capital or operating lease or any agreement in connection with the
deferred purchase price of property) under which any such obligation is
created, the effect of which default is to cause or permit the holder of
such obligation (or the other party to such other agreement) to cause such
obligation to become due prior to its stated maturity or terminate such
other agreement.
11.6 ASSIGNMENT FOR CREDITORS. Borrower makes an assignment for the
benefit of creditors, fails to pay, or admits in writing its inability to
pay its debts as they mature; or if a trustee of any substantial part of
the assets of Borrower is applied for or appointed, and in the case of such
trustee being appointed in a proceeding brought against Borrower, Borrower,
by any action or failure to act indicates its approval of, consent to, or
acquiescence in such appointment and such appointment is not vacated,
stayed on appeal or otherwise shall not have ceased to continue in effect
within sixty (60) days after the date of such appointment.
11.7 BANKRUPTCY. Any proceeding involving Borrower, is commenced by
or against Borrower under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law or statute
of the federal government or any state government, and in the case of any
such proceeding being instituted against Borrower, (i) Borrower, by any
action or failure to act indicates its approval of, consent to or
acquiescence therein, or (ii) an order shall be entered approving the
petition in such proceedings and such order is not vacated, stayed on
appeal or otherwise shall not have ceased to continue in effect within
sixty (60) days after the entry thereof.
11.8 JUDGMENTS. The entry of any judgment, decree, levy,
attachment, garnishment or other process, or the filing of any Lien against
Borrower in excess of $1,000,000 in the aggregate, which is not fully
covered by insurance, and which judgment or other process shall not have
been, within sixty (60) days from the entry thereof, (i) bonded over to the
satisfaction of the Bank and appealed, (ii) vacated or (iii) discharged.
11.9 CHANGE IN CONTROL. Any Change in Control shall occur. For
purposes herein, "Change in Control" means any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, except that a person or group shall be deemed to have "beneficial
ownership" of all securities that such person or group has the right to
acquire (such right, an "option right"), whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
30% or more of the equity securities of Borrower entitled to vote for
members of the board of directors or equivalent governing body of Borrower
on a fully diluted basis (and, taking into account all such securities that
such person or group has the right to acquire pursuant to any option
right).
26
11.10 MATERIAL ADVERSE EVENT. The occurrence of any material adverse
event which causes a change in the financial condition of Borrower, or
which would have a material adverse effect on the business of Borrower.
12. REMEDIES.
Upon the occurrence of an Event of Default, the Bank shall have all
rights, powers and remedies set forth in the Loan Documents, in any written
agreement or instrument (other than this Agreement or the Loan Documents)
relating to any of the Obligations or any security therefor, or as
otherwise provided at law or in equity. Without limiting the generality of
the foregoing, the Bank may, at its option upon the occurrence of an Event
of Default, declare its commitments to Borrower to be terminated and all
Obligations to be immediately due and payable, PROVIDED, HOWEVER, that upon
the occurrence of an Event of Default under either SECTION 11.6 or
SECTION 11.7, all commitments of the Bank to Borrower shall immediately
terminate and all Obligations shall be automatically due and payable, all
without demand, notice or further action of any kind required on the part
of the Bank. Borrower hereby waives any and all presentment, demand,
notice of dishonor, protest, and all other notices and demands in
connection with the enforcement of the Bank's rights under the Loan
Documents, notwithstanding anything contained herein or in the Loan
Documents to the contrary. In addition to the foregoing:
12.1 UCC AND OFFSET RIGHTS. The Bank may exercise, from time to
time, any and all rights and remedies available to it under the UCC or
under any other applicable law in addition to, and not in lieu of, any
rights and remedies expressly granted in this Agreement or in any other
agreements between Borrower and the Bank, and may, without demand or notice
of any kind, appropriate and apply toward the payment of such of the
Obligations, whether matured or unmatured, including costs of collection
and attorneys' and paralegals' fees, and in such order of application as
the Bank may, from time to time, elect, any indebtedness of the Bank to
Borrower, however created or arising, including, but not limited to,
balances, credits, deposits, accounts or moneys of Borrower in the
possession, control or custody of, or in transit to the Bank. Borrower
hereby waives the benefit of any law that would otherwise restrict or limit
the Bank in the exercise of its right, which is hereby acknowledged, to
appropriate at any time hereafter any such indebtedness owing from the Bank
to Borrower.
12.2 ADDITIONAL REMEDIES. The Bank shall have the right and power
to upon the occurrence of an Event of Default:
(a) extend, renew or modify for one or more periods (whether
or not longer than the original period) any Note, any other of the
Obligations, any obligation of any nature of any other obligor with respect
to any Note or any of the Obligations; and
(b) grant releases, compromises or indulgences with respect
to the Notes, any of the Obligations, any extension or renewal of any of
the Obligations, any security therefor, or to any other obligor with
respect to any Note or any of the Obligations.
12.3 ATTORNEY-IN-FACT. Upon an Event of Default, Borrower hereby
irrevocably makes, constitutes and appoints the Bank (and any officer of
the Bank or any Person designated by the Bank for that purpose) as
Borrower's true and lawful proxy and attorney-in-fact (and agent-in-fact)
in Borrower's name, place and stead, with full power of substitution, to
take such actions as are permitted in this Agreement. Borrower hereby
acknowledges that the constitution and appointment of such proxy and
attorney-in-fact are coupled with an interest and are irrevocable.
Borrower hereby ratifies and confirms all that said attorney-in-fact may do
or cause to be done by virtue of any provision of this Agreement.
27
12.4 NO MARSHALING. The Bank shall not be required to marshal any
present or future asset security for, or other assurances of payment of,
the Obligations or any of them or to resort to such asset security or other
assurances of payment in any particular order. To the extent that it
lawfully may, Borrower hereby agrees that it will not invoke any law
relating to the marshaling of assets which might cause delay in or impede
the enforcement of the Bank's rights under this Agreement or under any
other instrument creating or evidencing any of the Obligations or under
which any of the Obligations is outstanding or by which any of the
Obligations is secured or payment thereof is otherwise assured, and, to the
extent that it lawfully may, Borrower hereby irrevocably waives the
benefits of all such laws.
12.5 APPLICATION OF PROCEEDS. The Bank will within one (1) New York
Banking Day after receipt of cash or solvent credits from collection of
items of payment, proceeds of assets or any other source, apply the whole
or any part thereof against the Obligations secured hereby. The Bank shall
further have the exclusive right to determine how, when and what
application of such payments and such credits shall be made on the
Obligations, and such determination shall be conclusive upon Borrower. Any
proceeds of any disposition by the Bank of all or any part of Borrower's
assets may be first applied by the Bank to the payment of expenses incurred
by the Bank in connection with the enforcement of the obligations of
Borrower hereunder, including attorneys' fees and legal expenses as
provided for in SECTION 13 hereof.
12.6 NO WAIVER. No Event of Default shall be waived by the Bank
except in writing. No failure or delay on the part of the Bank in
exercising any right, power or remedy hereunder shall operate as a waiver
of the exercise of the same or any other right at any other time; nor shall
any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right,
power or remedy hereunder. There shall be no obligation on the part of the
Bank to exercise any remedy available to the Bank in any order. The
remedies provided for herein are cumulative and not exclusive of any
remedies provided at law or in equity. Borrower agrees that in the event
that Borrower fails to perform, observe or discharge any of its Obligations
or liabilities under this Agreement or any other agreements with the Bank,
no remedy of law will provide adequate relief to the Bank, and further
agrees that the Bank shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
13. MISCELLANEOUS.
13.1 OBLIGATIONS ABSOLUTE. None of the following shall affect the
Obligations of Borrower to the Bank under this Agreement:
(a) acceptance or retention by the Bank of other property or
any interest in property as security for the Obligations;
(b) release by the Bank of Borrower or of any party liable
with respect to the Obligations;
(c) release, extension, renewal, modification or substitution
by the Bank of the Notes, or any note evidencing any of the Obligations, or
the compromise of the Obligations; or
(d) failure of the Bank to resort to any other security or to
pursue Borrower or any other obligor liable for any of the Obligations.
13.2 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and is the final expression of the intentions
of Borrower and the Bank. No promises, either expressed or implied, exist
between Borrower and the Bank, unless contained herein. This Agreement
supersedes all negotiations, representations, warranties, commitments,
offers, contracts (of any kind or nature, whether oral or written) prior to
or contemporaneous with the execution hereof.
28
13.3 AMENDMENTS; WAIVERS. No amendment, modification, termination,
discharge or waiver of any provision of this Agreement or of the Loan
Documents, or consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Bank and Borrower, and then such waiver or consent shall be effective only
for the specific purpose for which given.
13.4 WAIVER OF DEFENSES. BORROWER WAIVES EVERY PRESENT AND FUTURE
DEFENSE, CAUSE OF ACTION, COUNTERCLAIM OR SETOFF WHICH BORROWER MAY NOW
HAVE OR HEREAFTER MAY HAVE TO ANY ACTION BY THE BANK IN ENFORCING THIS
AGREEMENT. BORROWER WAIVES ANY IMPLIED COVENANT OF GOOD FAITH AND RATIFIES
AND CONFIRMS WHATEVER THE BANK MAY DO PURSUANT TO THE TERMS OF THIS
AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK GRANTING
ANY FINANCIAL ACCOMMODATION TO BORROWER.
13.5 WAIVER OF JURY TRIAL. THE BANK AND BORROWER, AFTER CONSULTING
OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY, THE RIGHT TO TRIAL BY JURY
WITH RESPECT TO ANY LEGAL PROCEEDING BASED HEREON, OR ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER
OBLIGATIONS, OR ANY OTHER AGREEMENT EXECUTED OR CONTEMPLATED TO BE EXECUTED
IN CONJUNCTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT OR COURSE OF
DEALING IN WHICH THE BANK AND BORROWER ARE ADVERSE PARTIES. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE BANK GRANTING ANY FINANCIAL ACCOMMODATION
TO BORROWER.
13.6 LITIGATION. TO INDUCE THE BANK TO MAKE THE LOANS, BORROWER
IRREVOCABLY AGREES THAT ALL ACTIONS ARISING, DIRECTLY OR INDIRECTLY, AS A
RESULT OR CONSEQUENCE OF THIS AGREEMENT, THE NOTE, ANY OTHER AGREEMENT WITH
THE BANK, SHALL BE INSTITUTED AND LITIGATED ONLY IN COURTS HAVING THEIR
SITUS IN THE CITY OF CHICAGO, ILLINOIS. BORROWER HEREBY CONSENTS TO THE
EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT HAVING ITS
SITUS IN SAID CITY, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS.
BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND CONSENTS
THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, DIRECTED TO BORROWER AS SET FORTH HEREIN IN THE MANNER
PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT OR OTHERWISE.
13.7 ASSIGNABILITY. The Bank may at any time assign the Bank's
rights in this Agreement, the Note, the Obligations, or any part thereof,
and the Bank thereafter shall be relieved from all liability with respect
thereto; PROVIDED, HOWEVER, that so long as no Event of Default exists, the
Bank shall obtain the consent of the Borrower prior to any assignment, such
consent not to be unreasonably withheld or delayed. In addition, the Bank
may at any time sell one or more participations in the Loans. Borrower may
not sell or assign this Agreement, or any other agreement with the Bank or
any portion thereof, either voluntarily or by operation of law, without the
prior written consent of the Bank. This Agreement shall be binding upon
the Bank and Borrower and its respective legal representatives and
successors. All references herein to Borrower shall be deemed to include
any successors, whether immediate or remote. In the case of a joint
venture or partnership, the term "Borrower" shall be deemed to include all
joint venturers or partners of Borrower, who shall be jointly and severally
liable hereunder.
13.8 CONFIDENTIALITY. Borrower and the Bank hereby agree and
acknowledge that any and all information relating to Borrower which is
(i) furnished by Borrower to the Bank (or to any affiliate of the Bank),
and (ii) non-public, confidential or proprietary in nature, shall be kept
confidential by the Bank or such affiliate in accordance with applicable
law, PROVIDED, HOWEVER, that such information and other credit information
relating to Borrower may be distributed by the Bank or such affiliate to
the Bank's or such affiliate's directors, officers, employees, attorneys,
affiliates, auditors and regulators, and upon the order of a court or other
governmental agency having jurisdiction over the Bank or such affiliate, to
any other party. Borrower and the Bank further agree that this provision
shall survive the termination of this Agreement.
29
13.9 BINDING EFFECT. This Agreement shall become effective upon
execution by Borrower and the Bank.
13.10 GOVERNING LAW. This Agreement, the Loan Documents and the Note
shall be delivered and accepted in and shall be deemed to be contracts made
under and governed by the internal laws of the State of Illinois (but
giving effect to federal laws applicable to national banks), and for all
purposes shall be construed in accordance with the laws of such State,
without giving effect to the choice of law provisions of such State.
13.11 ENFORCEABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by, unenforceable or invalid under any jurisdiction, such
provision shall as to such jurisdiction, be severable and be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
13.12 SURVIVAL OF BORROWER REPRESENTATIONS. All covenants,
agreements, representations and warranties made by Borrower herein shall,
notwithstanding any investigation by the Bank, be deemed material and
relied upon by the Bank and shall survive the making and execution of this
Agreement and the Loan Documents and the issuance of the Notes, and shall
be deemed to be continuing representations and warranties until such time
as Borrower has fulfilled all of its Obligations to the Bank, and the Bank
has been paid in full. The Bank, in extending financial accommodations to
Borrower, is expressly acting and relying on the aforesaid representations
and warranties.
13.13 EXTENSIONS OF THE BANK'S COMMITMENT AND NOTE. This Agreement
shall secure and govern the terms of any extensions or renewals of the
Bank's commitment hereunder and the Note pursuant to the execution of any
modification, extension or renewal note executed by Borrower and accepted
by the Bank in its sole and absolute discretion in substitution for the
Notes.
13.14 TIME OF ESSENCE. Time is of the essence in making payments of
all amounts due the Bank under this Agreement and in the performance and
observance by Borrower of each covenant, agreement, provision and term of
this Agreement.
13.15 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute one and the same
instrument.
13.16 FACSIMILE SIGNATURES. The Bank is hereby authorized to rely
upon and accept as an original any Loan Documents or other communication
which is sent to the Bank by facsimile, telegraphic or other electronic
transmission (each, a "Communication") which the Bank in good faith
believes has been signed by Borrower and has been delivered to the Bank by
a properly authorized representative of Borrower, whether or not that is in
fact the case. Notwithstanding the foregoing, the Bank shall not be
obligated to accept any such Communication as an original and may in any
instance require that an original document be submitted to the Bank in lieu
of, or in addition to, any such Communication.
13.17 NOTICES. Except as otherwise provided herein, Borrower waives
all notices and demands in connection with the enforcement of the Bank's
rights hereunder. All notices, requests, demands and other communications
provided for hereunder shall be in writing, sent by certified or registered
mail, postage prepaid, by facsimile, telegram or delivered in person, and
addressed as follows:
30
If to Borrower: c/o Landauer, Inc.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Sidley Austin LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Bank: U.S. Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
or, as to each party, at such other address as shall be designated by such
party in a written notice to each other party complying as to delivery with
the terms of this subsection. No notice to or demand on Borrower in any
case shall entitle Borrower to any other or further notice or demand in
similar or other circumstances.
13.18 COSTS, FEES AND EXPENSES RELATED TO AGREEMENT AND OTHER
AGREEMENTS. In accordance with this Agreement on or prior to the date
hereof and thereafter upon demand by the Bank, Borrower shall pay or
reimburse the Bank for all reasonable costs, fees and expenses incurred by
the Bank or for which the Bank becomes obligated, in connection with the
negotiation, preparation, consummation and enforcement of this Agreement
and the other Loan Documents, including, but not limited to, reasonable
attorneys' fees plus costs and expenses of such attorneys or the Bank;
search fees, reasonable costs and expenses; and all taxes payable in
connection with this Agreement or the other Loan Documents. That portion
of Borrower's Obligations consisting of reasonable costs, expenses or
advances to be reimbursed by Borrower to the Bank pursuant to this
Agreement or the other Loan Documents which are not paid on or prior to the
date hereof shall be payable by Borrower to the Bank on demand. If at any
time or times hereafter the Bank: (a) employs counsel for advice or other
representation (i) with respect to this Agreement or the other Loan
Documents, (ii) to represent the Bank in any litigation, contest, dispute,
suit or proceeding or to commence, defend, or intervene or to take any
other action in or with respect to any litigation, contest, dispute, suit,
or proceeding (whether instituted by the Bank, Borrower, or any other
Person) in any way or respect relating to this Agreement, the other Loan
Documents or Borrower's affairs, or (iii) to enforce any rights of the Bank
against Borrower or any other person that may be obligated to the Bank by
virtue of this Agreement or the other Loan Documents; (b) takes any action
31
to protect, collect, sell, liquidate, or otherwise dispose of any of the
assets of Borrower; and/or (c) attempts to or enforces any of the Bank's
rights or remedies under the Agreement or the other Loan Documents, the
reasonable costs and expenses incurred by the Bank in any manner or way
with respect to the foregoing, shall be part of Borrower's Obligations,
payable by Borrower to the Bank on demand.
13.19 INDEMNIFICATION. Borrower agrees to defend (with counsel
satisfactory to the Bank), protect, indemnify and hold harmless each
Indemnified Party from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs,
expenses and distributions of any kind or nature (including, without
limitation, the disbursements and the reasonable fees of counsel for each
Indemnified Party thereto, which shall also include, without limitation,
attorneys' fees and time charges of attorneys who may be employees of the
Bank, any parent entity or affiliated entity of the Bank), which may be
imposed on, incurred by, or asserted against, any Indemnified Party
(whether direct, indirect or consequential and whether based on any
federal, state or local laws or regulations, including, without limitation,
securities, Environmental Laws and commercial laws and regulations, under
common law or in equity, or based on contract or otherwise) in any manner
relating to or arising out of this Agreement or any of the Loan Documents,
or any act, event or transaction related or attendant thereto, the
preparation, execution and delivery of this Agreement and the Loan
Documents, including, but not limited to, the making or issuance and
management of the Loans, the use or intended use of the proceeds of the
Loans, the enforcement of the Bank's rights and remedies under this
Agreement, the Loan Documents, the Notes, any other instruments and
documents delivered hereunder, or under any other agreement between
Borrower and the Bank; PROVIDED, HOWEVER, that Borrower shall not have any
obligations hereunder to any Indemnified Party with respect to matters
caused by or resulting from the willful misconduct or gross negligence of
such Indemnified Party. To the extent that the undertaking to indemnify
set forth in the preceding sentence may be unenforceable because it
violates any law or public policy, Borrower shall satisfy such undertaking
to the maximum extent permitted by applicable law. Any liability,
obligation, loss, damage, penalty, cost or expense covered by this
indemnity shall be paid to each Indemnified Party on demand, and, failing
prompt payment, shall, together with interest thereon at the Default Rate
from the date incurred by each Indemnified Party until paid by Borrower, be
added to the Obligations of Borrower. The provisions of this SECTION 13.19
shall survive the satisfaction and payment of the other Obligations and the
termination of this Agreement.
13.20 PATRIOT ACT, BANK SECRECY ACT AND OFFICE OF FOREIGN ASSETS
CONTROL. As required by federal law and the Bank's policies and practices,
the Bank may need to obtain, verify and record certain customer
identification information and documentation in connection with opening or
maintaining accounts, or establishing or continuing to provide services and
Borrower agrees to provide such information. In addition, and without
limiting the foregoing sentence, Borrower shall (a) ensure, and cause each
Subsidiary, if applicable, to ensure, that no Person who owns a controlling
interest in or otherwise controls Borrower or any Subsidiary is or shall be
listed on the Specially Designated Nationals and Blocked Person List or
other similar lists maintained by the Office of Foreign Assets Control
("OFAC"), the Department of the Treasury or included in any Executive
Orders, (b) not use or permit the use of the proceeds of the Loans to
violate any of the foreign asset control regulations of OFAC or any
enabling statute or Executive Order relating thereto, and (c) comply, and
cause each Subsidiary, if applicable, to comply, with all applicable Bank
Secrecy Act ("BSA") laws and regulations, as amended.
[SIGNATURE PAGE FOLLOWS]
32
(Signature Page to Loan Agreement)
IN WITNESS WHEREOF, Borrower and the Bank have executed this Loan
Agreement as of the date first above written.
▇▇▇▇▇▇▇▇, INC., a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Its: SVP/CFO
---------------------------------
Agreed and accepted:
U.S. BANK NATIONAL ASSOCIATION,
a national banking association
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Its: SVP
---------------------------------
33
EXHIBIT A
to
Loan Agreement
REVOLVING NOTE
--------------
$15,000,000 Chicago, Illinois
October 5, 2007
FOR VALUE RECEIVED, on or before October 31, 2009 (or, if such day is
not a New York Banking Day, on the next following New York Banking Day),
the undersigned, ▇▇▇▇▇▇▇▇, INC., a Delaware corporation (referred to herein
as "Borrower") promises to pay to the order of U.S. BANK NATIONAL
ASSOCIATION, a national banking association (herein, together with its
successors and assigns, called the "Bank"), the maximum principal sum of
FIFTEEN MILLION AND 00/100 DOLLARS ($15,000,000) or, if less, the aggregate
unpaid principal amount of all Loans made by the Bank to the undersigned
pursuant to that certain Loan Agreement of even date herewith between
Borrower and the Bank (herein, as the same may be amended, modified or
supplemented from time to time, called the "Loan Agreement") as shown
either on the schedule attached hereto (and any continuation thereof) or in
the Bank's records.
Borrower further promises to pay to the order of the Bank interest on
the aggregate unpaid principal amount hereof from time to time outstanding
from the date hereof until paid in full at such rates and at such times as
shall be determined in accordance with the provisions of the Loan
Agreement. Accrued interest shall be payable on the dates specified in the
Loan Agreement.
Payments of both principal and interest are to be made in the lawful
money of the United States of America in immediately available funds at the
Bank's principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, or at such other place as may be designated by the Bank to Borrower
in writing.
This Note is the Revolving Note referred to in, evidences
indebtedness incurred under, and is subject to the terms and provisions of,
the Loan Agreement. The Loan Agreement, to which reference is hereby made,
sets forth said terms and provisions, including those under which this Note
may or must be paid prior to its due date or may have its due date
accelerated. Terms used but not otherwise defined herein are used herein
as defined in the Loan Agreement.
In addition to, and not in limitation of, the foregoing and the
provisions of the Loan Agreement hereinabove referred to, Borrower further
agrees, subject only to any limitation imposed by applicable law, to pay
all expenses, including attorneys' fees and expenses, incurred by the
holder of this Note in seeking to collect any amounts payable hereunder
which are not paid when due, whether by acceleration or otherwise.
All parties hereto, whether as makers, endorsers or otherwise,
severally waive presentment, demand, protest and notice of dishonor in
connection with this Note.
This Note is binding upon the undersigned and its successors and
assigns, and shall inure to the benefit of the Bank and its successors and
assigns. This Note is made under and governed by the laws of the State of
Illinois without regard to conflict of laws principles.
A-1
IN WITNESS WHEREOF, Borrower has executed this Note as of the day and
year first above written.
▇▇▇▇▇▇▇▇, INC., a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Its: SVP/CFO
----------------------------------
A-2
EXHIBIT B
to
Loan Agreement
FORM OF COMPLIANCE CERTIFICATE
------------------------------
To: U.S. Bank National Association
Please refer to the Loan Agreement dated as of October 5, 2007 (as
amended or otherwise modified from time to time, the "Loan Agreement")
between each of ▇▇▇▇▇▇▇▇, INC., a Delaware corporation (the "Borrower"),
and U.S. Bank National Association. Terms used but not otherwise defined
herein are used herein as defined in the Loan Agreement.
I. REPORTS. Enclosed herewith is a copy of the [annual
audited/quarterly/monthly] report of Borrower as at
_____________, ____ (the "Computation Date"), which report
fairly presents in all material respects the financial
condition and results of operations (subject to the absence of
footnotes and to normal year-end adjustments) of Borrower as of
the Computation Date and has been prepared in accordance with
GAAP consistently applied.
II. FINANCIAL TESTS. Borrower hereby certifies and warrants to you
that the following is a true and correct computation as at the
Computation Date of the following ratios and/or financial
restrictions contained in the Loan Agreement:
A. Section 10.1 - Minimum Tangible Net Worth
1. Total Assets $__________________
2. Total Liabilities $__________________
3. (1) less (2) $__________________
4. (3) plus Subordinated Debt $__________________
5. LESS General Intangibles ($__________________)
6. LESS Amounts due from Affiliates ($__________________)
7. Total $__________________
8. Required $22,500,0000
B. Section 10.2 - Funded Debt/EBITDA Ratio
1. Required 1.0 to 1
Borrower further certifies to you that no Event of Default has
occurred and is continuing.
(Signature Page Follows)
B-1
IN WITNESS WHEREOF, Borrower has caused this Certificate to be
executed and delivered by its duly authorized officer on _________, ____.
▇▇▇▇▇▇▇▇, INC., a Delaware corporation
By:
-----------------------------------
Its:
-----------------------------------
B-2